National carrier Kenya Airways narrowed its net losses by 28.8 per cent to Ksh4 billion ($40 million) in the half year ended June, but the improved performance was not enough to stop the airline from sinking back into negative capital position.
The national carrier’s cost-cutting measures paid dividends as “other costs” dropped 41.3 per cent to Ksh2.9 billion ($29 million) while revenue rose 3.1 per cent to Ksh52.1 billion ($517 million) in the six months.
The airline, however, dropped back into negative equity of Sh3.8 billion, indicating the need for additional capital injection to soften the impact of its continued losses.
Biggest threat
The airline says higher fuel prices present the biggest threat to its margins in the short term.
“I just recall that when I started working for KQ, which was June 1 last year, the barrel was at $52. I just opened my phone now it's $75.99, which means $76, so just imagine this bigger cost has just grown like this over the last 12 months,” said KQ CEO Sebastian Mikosz after the release of the half-year figures yesterday.
“This is why the board has approved refreshed and a little reorganised hedging policy and as an airline we will start hedging soon and building our hedging position to protect our cash flow and to protect us against what seems to be not only an African problem but a worldwide industry problem.”
Continue Reading
No comments:
Post a Comment