Kenya Airways has issued a warning that the company will record a 25 percent increase in losses, despite going through a multi-billion restructuring, according to local media reports.
Kenya Airways is expected to record a net loss of at least Sh7.3 billion in 2019. Last year, the carrier reported a net loss of Sh5.9 billion, up from Sh5.1 billion in 2017.
With regard to the losses, Kenya Airlines said in a statement that, ”The board brings to the attention of the public that the earnings for the current financial year are expected to be lower by at least 25 percent than earnings reported in 2018. This is based on forecasted financial results for the year ending December 31.”
Kenya Airways chairman Micheal Joseph also told the investors through a statement that although the revenue margin has improved, profits were constrained due to increased competition in the markets and its effect on the pricing.
This will result in a 25 percent increase in losses for Kenya Airways.
The last time the airline reported a profit was in 2011 when it recorded a profit of Sh4.1 billion.
In the month of July, lawmakers in Kenya voted for the nationalisation of Kenya Airways, which has been accumulating debt and running under losses.
Earlier this month, Sebastian Mikosz, chief executive at Kenya Airways has asked the Kenyan government to accelerate the process of nationalisation of Kenya Airways.
Sebastian Mikosz highlighted that the airline is failing to compete with other state-owned carriers because the governments are heavily investing in them. He pointed out that countries like Tanzania and Rwanda are heavily investing in their national carriers, which is threatening Kenya Airways’ market share.