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Kenya Airways Reports Massive Losses for FY 2022, Plans to End State Support by End of 2023
Kenya Airways (KQ) has released its full-year financial results for the year ending Dec. 31, 2022, reporting a massive loss of Ksh 68.2 billion ($633 million) at a virtual investor briefing. The loss was attributed to the pandemic-induced decline in air travel and the resulting reduction in demand for KQ’s services.
Despite the losses, the airline remains optimistic and has developed a turnaround plan aimed at ending its reliance on state support by the end of 2023.
Here are the key highlights of the report:
Massive Losses in FY 2022
The pandemic-induced decline in air travel led to a significant reduction in KQ’s passenger numbers and revenue. The airline reported a loss of Ksh 68.2 billion ($633 million) for FY 2022, compared to a loss of Ksh 36.2 billion ($335 million) in FY 2021. The loss in FY 2022 was the largest in the airline’s history and highlights the severe impact of the pandemic on the aviation industry.
The airline’s revenue for FY 2022 was Ksh 36.9 billion ($342 million), a 55% decline from the previous year’s revenue of Ksh 82.6 billion ($765 million). The decline in revenue was due to the reduction in passenger numbers and the closure of international borders.
KQ’s Turnaround Plan
Despite the challenges faced by the airline, KQ remains optimistic and has developed a turnaround plan aimed at ending its reliance on state support by the end of 2023. The plan includes a number of initiatives, including:
Network optimization: KQ plans to optimize its network by focusing on profitable routes and reducing unprofitable ones. This will help the airline to reduce its operating costs and improve its profitability.
Fleet restructuring: KQ plans to restructure its fleet by retiring older aircraft and replacing them with newer, more fuel-efficient models. This will help the airline to reduce its fuel costs and improve its environmental performance.
Cost optimization: KQ plans to optimize its costs by reducing overheads, renegotiating contracts with suppliers, and implementing more efficient operational processes. This will help the airline to reduce its operating costs and improve its profitability.
Revenue diversification: KQ plans to diversify its revenue streams by expanding its cargo operations, developing new products and services, and exploring new markets. This will help the airline to reduce its reliance on passenger revenue and improve its overall revenue performance.
End of State Support by End of 2023
The Kenyan government has been providing financial support to KQ to help the airline weather the pandemic-induced crisis. However, the airline aims to end its reliance on state support by the end of 2023. This will be achieved through the implementation of its turnaround plan, which is expected to improve the airline’s profitability and financial performance.
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