H1: Kenya Airways Records Improved Performance

Despite the devastating effects of COVID- 19 resulting in depressing half year results, one of Africa’s biggest airlines, Kenya Airways, has recorded improved performance to a similar period in the prior year.

This was disclosed on Thursday when the carrier released its financial results for the six-month period ended June 2021, at a virtual investor briefing.

The Group’s total revenue during the period reduced by nine per cent to Kshs. 27,354 million.

The reduction is due to the cessation of domestic scheduled operations in the month of April 2021, as well as travel restrictions, and lockdowns due to a surge in virus cases in key domestic and international markets, including UK, India, China,  UAE and the U.S. Prior to the pandemic, the carrier flew to over 40 African destinations.

Currently the airline operates in 40 international destinations and two domestic routes with significantly reduced frequencies of approximately 65 per cent as compared to 2019. COVID-19 restrictions on travel by various states remain the biggest challenge.

In addition, the rollout of the coronavirus vaccines in the African continent remains low, with less than two per cent of Africans having received the vaccine, while in other markets, high vaccination levels have allowed progressive reopening of their economies.

The current upsurge, coupled with the continent’s low vaccination rates, has contributed to low passenger traffic from Africa to other markets like Europe who have issued  or extend stringent travel restrictions on travellers from African countries in a measure to prevent the spread of the new COVID-19 variants.

As a result, a total of 0.8 million passengers were uplifted during the first half of 2021, a 20 per cent decline in comparison to a similar period in the previous year.

Though passenger revenue declined by 17 per cent to Kshs. 20,230 million, cargo revenues went up by 60 per cent due to strong focus on freighter operations.

 

The Group has been able to uplift an increased 500 tonnes monthly, showing its cargo division’s outstanding agility in adapting its operations to provide air freight services in this new environment. Kenya Airways’ Board Chairman Michael Joseph says, “During the period, the company’s main focus was, and still is cash conservation.

The company has exploited opportunities of raising much needed revenue through passenger charters and ramped up cargo operations. Other initiatives undertaken by management include partnerships with other airlines, lease rentals re-negotiations, payment plans with suppliers and partial deferment of staff salaries.”

According to IATA, Q1’21 results show that the start of the year was still very weak for the airline industry, as virus outbreaks paused air travel recovery in many important markets.

Faced with long recovery prospects, diminishing revenue occasioned by reduced demand in passenger business, and increased costs due to tighter health and safety measures, the business focus for the rest of 2021 will be ensuring the survival and the rebound of the company.