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Money News

Kenya Airways estimates coronavirus revenue loss at $100 million - CEO

NAIROBI (Reuters) - Kenya Airways has lost an estimated $100 million in revenue as a result of the COVID-19 pandemic and related lockdowns, CEO Allan Kilavuka told reporters on Friday.

FILE PHOTO: Kenyan Airways planes are parked at the Jomo Kenyatta International Airport in Nairobi, Kenya, March 24, 2020. Picture taken March 24, 2020. REUTERS/Baz Ratner/File Photo

The coronavirus crisis has hit the global aviation industry hard, with Africa carriers alone expected to lose $6 billion this year in revenue.

“Our estimate is since January to date we have probably lost in terms of revenue about $100 million,” Kilavuka said, adding that figure was expected to grow to between $400 and $500 million by the end of the year.

Kenya Airways, in which Air France-KLM holds a small stake, was struggling long before the outbreak, posting 2019 losses of nearly 13 billion Kenyan shillings ($122 million) compared to 7.56 billion the previous year.

The government has been working on a plan to renationalise the airline in an attempt to save the business after a 2017 debt restructuing did little to improve its outlook.

The pandemic crisis has delayed that process by a few months but it is still ongoing, chairman Michael Joseph said on Friday.

Kenya closed its airspace in March after confirming its first case of COVID-19. So far it has reported 5,384 cases and 132 deaths.

The airline hopes to resume commercial flights in July if the government lifts restrictions on air travel.

Joseph said the carrier plans to reduce the number of routes it serves and the frequency of flights, with passenger demand expected to remain depressed for at least eighteen months.

Kenya Airways currently operates 42 aircraft on routes to 56 destinations in Africa, the Middle East, Asia, Europe and North America.

“What we are trying to do is to emerge from this crisis...with a much more slimmed down, more efficient, more cost-efficient airline,” Joseph said.

($1 = 106.4000 Kenyan shillings)

Reporting by Omar Mohammed; editing by Giulia Paravicini, Kirsten Donovan

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