Kenya Airways makes massive Pre-Tax losses

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Kenya Airways is one of Africa’s largest carriers

 

Kenya Airways, sub-Saharan Africa’s third-largest carrier,said on Thursday its pretax loss for the year to March widened to 29.71 billion Kenyan shillings ($293 million) from 4.86 billion shillings a year earlier.

The airline says the high losses are due to higher costs and losses arising from fuel hedging after oil prices fell.

The carrier, one of Africa’s largest, has faced rising debts due to new plane purchases while Kenya’s tourism industry, a key source of passengers, has slumped following a spate of Islamist militant attacks.

Finance Director Alex Mbugua told an investor briefing that the airline, which is 26.73 percent owned by Air France-KLM , was also hit by a slowdown in tourist arrivals to Kenya and competition from Gulf carriers.

Kenya Airways now says it will seek a $200-million loan and sell some of its aircraft after posting a record full-year loss as tourist numbers decline.

The airline appointed African Export-Import Bank as its financial adviser to raise long-term capital and refinance the business, Chief Executive Officer Mbuvi Ngunze told reporters Thursday in the capital, Nairobi.

The company also faced increased competition and booked an impairment following the sale of some of its Boeing Co. planes, he said.

“Those results are clearly a watershed for KQ and for this country,” Ngunze said, referring to the airline’s marketing code.