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Monday, January 30, 2023

Kenya Airways Releases HY 2021 Results

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At a virtual investor briefing held this afternoon, Kenya Airways PLC (KQ) published its financial results for the six-month period ending June 2021. The COVID-19 situation continued to have a significant impact on operations in the first half of 2021, resulting in lower half-year profits. However, the airline’s performance improved when compared to the same period the previous year.

During the period, the Group’s overall income decreased by 9% to Kshs. 27,354 million. The drop is due to the end of domestic scheduled operations in April 2021, as well as travel restrictions and lockdowns caused by an increase in viral cases in key local and international markets such as the United Kingdom, India, China, the United Arab Emirates, and the United States.

Prior to the pandemic, the airline served more than 40 African locations. Currently, the airline serves 40 international destinations and two domestic routes, with around 65 percent fewer flights than in 2019. COVID-19 travel limitations imposed by many states continue to be the most difficult obstacle. Furthermore, the deployment of coronavirus vaccinations in Africa remains low, with less than 2% of Africans receiving the vaccine, whereas in other areas, high vaccination levels have allowed for the gradual reopening of their economy.

The current rise, combined with the continent’s poor vaccination rates, has resulted in limited passenger movement from Africa to other markets such as Europe, which has issued or extended tight travel restrictions on African travelers in order to avoid the spread of the new COVID-19 strains. As a result, 0.8 million passengers were uplifted during the first half of 2021, a 20% decrease from the previous year’s comparable period.

Though passenger revenue fell by 17% to Kshs. 20,230 million, cargo revenue increased by 60% due to a significant concentration on freighter operations. The Group has boosted its monthly uplift by 500 tonnes, demonstrating its cargo division’s excellent agility in changing its operations to deliver air freight services in this new climate.

According to Kenya Airways Board Chairman Michael Joseph, “at that time, the company’s principal objective was, and continues to be, cash conservation.” The company has taken advantage of chances to generate much-needed money through passenger charters and has expanded freight operations. Partnerships with other airlines, lease rental renegotiations, payment plans with suppliers, and partial salary postponement are among the other actions done by management.”

According to IATA, Q1 2021 figures show that the airline industry’s start to the year was still very weak, as virus outbreaks slowed air travel recovery in many key areas. Faced with long recovery prospects, declining income as a result of lower passenger demand, and rising costs as a result of tougher health and safety regulations, the business priority for the remainder of 2021 will be securing the company’s survival and return.

Allan Kilavuka, Kenya Airways Group Managing Director and CEO, stated, “Despite the current worldwide crisis caused by the COVID-19 epidemic, we will continue to take an agile strategy in responding to the current dynamic environment.” Our priority is business recovery, as well as continuing to contribute to the reconstruction of economies and communities affected by the pandemic. Restoring customer trust in business and leisure travel will be critical to increasing demand, as will developing agile and dynamic business models that are sustainable and responsive to customer needs.”

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