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KQ predicts passengers to remain at 50pc this year

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Kenya Airways planes packed at JKIA. FILE PHOTO | NMG

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Summary

  • Kenya Airways has forecasted passenger numbers to remain at half of its capacity for the remainder of the year after the airline resumed international week last Saturday.
  • In an interview with Reuters, KQ chief executive officer Allan Kilavuka said 2020 for them is like a lost year because of anticipated low demand, which at some point is as low as 25 percent.
  • Kenya Airways resumed international flights on Saturday, heading to about 30 destinations for the first time since the routes were suspended in March due to the coronavirus.

Kenya Airways #ticker:KQ has forecasted passenger numbers to remain at half of its capacity for the remainder of the year after the airline resumed international week last Saturday.

In an interview with Reuters, KQ chief executive officer Allan Kilavuka said 2020 for them is like a lost year because of anticipated low demand, which at some point is as low as 25 percent.

Kenya Airways resumed international flights on Saturday, heading to about 30 destinations for the first time since the routes were suspended in March due to the coronavirus.

“In fact 2020, we call it a lost year, because at some point we even see demand of 25 percent in some months, in some months we see 38 percent,” Mr Kilavuka told Reuters.

He said for the rest of the year the airline expected demand to remain below 50 percent of capacity, but it would increase flight frequencies depending on demand.

“We announced we are starting with 27 destinations, we increased it to 30 just following demand,” Mr Kilavuka said during a ceremony ahead of seeing off a flight to London.

Low passenger numbers is set to hurt the carrier’s earnings in the current financial year. The airline reported a Sh12.9 billion loss for the financial year ended December 2019 up from Sh7.7 billion in 2018, a situation attributed to increased cost of operations.

The Covid-19 pandemic has depressed the global aviation industry, with African carriers alone expected to lose $6 billion this year in revenue.

Kenya Airways cut salaries by as much as 80 percent when the crisis started and sought a government bailout to help it take care of running costs after it grounded its planes when Kenya stopped commercial passenger flights to curb the spread of the virus.

In July, the carrier said it would lay off an unspecified of number of workers, reduce its network and offload some assets.

due to the coronavirus crisis.

The carrier revealed that they have so far laid off some 650 people, mostly trainee pilots, trainee cabin crew, technician trainees and newly hired staff on probation.

Another batch of contract employees received their dismissal letters last week. These employees were on contract employment.

“What I have to emphasise though is it’s not because we want to. Those employees have done nothing wrong. They are very good employees. It’s just that we cannot afford to keep them,” he said.

The airline was struggling long before the coronavirus outbreak, posting 2019 losses of almost 13 billion shillings ($120 million).

Last month the Nairobi Securities Exchange suspended trading of Kenya Airways shares for three months, citing the government’s plan to restructure the carrier, after it submitted to parliament a draft law on nationalising the airline.