Fuel Costs, Ballooning Wages To Blame For KQ Ksh7.5 Billion Loss – Mikosz
Kenya Airways recorded a 17.76 rise of its losses to Ksh7.59 billion for full year 2018, from Ksh6.41 billion loss made in the nine month period ended in December 2017.
The national carrier attributed the loss to high cost of fuel, high salaries and fleet ownership cost.
According to KQ CEO Sebastian Mikosz, high cost of fuel, high salaries and fleet ownership cost accounted for nearly two thirds of the its operating costs.
“Fuel is our greatest challenge and this will be for a while, oil prices are up by 30 percent. Fuel represents over 40 percent of our direct operating costs .We started mitigating this risk by implementing a new hedging policy with minimal risk,” said Mikosz.
However, the carrier reported growth in passenger numbers, which resulted in revenue growth of 41.3 percent to Ksh114.2 million. It also recorded a 52.3 percent growth in cargo revenue to Ksh8.68 billion.
Read: Kenya Airways To Start Direct Flights To Israel In March 2019
“2018 was a challenging year for KQ; we have however seen growth in passenger numbers. Management team have done a great job under the circumstances and thanks to the board for massive support,” said KQ chairman Michael Joseph.
KQ has battling with more than 20 foreign airlines that operate out of JKIA, including RwandAir, KLM, Swiss Air, Air France, Qatar, Turkish Airlines, and Air Mauritius.
Others are British Airways, Emirates, South African Airways, Air Saudi, and Ethiopian Airlines.
The company has been experiencing a bumpy flight following years of loss-making.
In a turn-around formulae, the company was planning to take over operations at the Jomo Kenyatta International Airport (JKIA) but the plans failed after a public outcry.
