Kenya Airways’ first-half losses double as Uganda relaunches national carrier
Kenya Airways is being renationalised which is struggling with debt, and which has had three CEOs in the past five years
Nairobi — Kenya Airways, which is being renationalised to save it from mounting debts, saw its first-half pre-tax loss more than double from a year earlier to 8.56-billion Kenyan shillings ($83m), its results statement showed on Tuesday.
Kenya’s parliament voted in July to renationalise the loss-making airline, which is struggling under a mountain of debt and has had three changes of CEO in the past five years as it struggles to compete with regional rivals.
The government plans to buy out minority shareholders including Air France-KLM’s 7.8% stake.
The carrier said its first-half revenue rose 12.2% from a year earlier to 58.55-billion shillings, which CFO Hellen Mathuka attributed to the launch of new routes and more frequent flights.
However, the airline’s operating costs rose to 61.45-billion shillings, from 53.22-billion shillings in the same period last year, Mathuka said. This was partly due to two Boeing 787 planes that had been sub-leased to Oman Air being returned during the first half of the year.
The government will take at least 21 months to take back full control of Kenya Airways, buying out minority shareholders and converting shares held by banks into Treasury bonds, a law maker briefed on the transaction said in July.
Also on Tuesday, Uganda relaunched its national airline after two decades with an inaugural flight to Nairobi, becoming the latest East African nation seeking to revive its aviation industry.
“The airline will first fly to seven destinations, starting with Nairobi, Mogadishu, Juba and Dar es Saalam, and then to Mombasa, Kilimanjaro and Bujumbura,” said prime minister Ruhakana Rugunda at Entebbe International Airport.
Uganda Airlines is launching into increasingly crowded East African skies, where both Rwanda and Tanzania have, in recent years, revived their national airlines in a bid to capture a slice of the booming market.
They are taking on regional giants Kenya Airways — and Ethiopian Airlines, which largely dominates the skies.