Kenya Airways (KQ) plans to resume passenger flights as soon as the government lifts a travel ban that had been imposed on international flights on March 22, ending months of lost revenue due to the COVID-19 pandemic.
The ban effectively cut off Kenya Airways’ flow of new revenues at a time it had no cash revenues.
It is expected that air travel will be fully operational by the third quarter of the year.
The airline sees the move as the best-case scenario but warns that the ultimate length of suspension of the flight business is still uncertain.
According to KQ in its latest report, “There is reasonable expectation that the flights could resume in the third quarter of the year with business expected to have started at very low capacity and a gradual ramp-up, influenced by the gradual lifting of travel bans, uncertain passenger confidence and health safety measures.”
Discussions with key industry stakeholders are going on in relation to a safe return to passenger routes, the airline says.
It is expected that KQ will be able to cover its variable costs on resumption.
“The resumption is expected to happen within the period of the moratoriums already being negotiated with lenders and lessors and thereby allowing the airline to grow back its revenue base and gradually cover its fixed costs,” says the airline.
The airline has been operating only cargo flights for essentials services such as medicine but it has not been enough to sustain business given that it was already a loss territory before the coronavirus pandemic.
KQ’s Chief Executive Officer Allan Kilavuka had unsuccessfully applied for a bailout from the National Treasury to help meet maintenance costs of grounded planes, salaries and settle utility bills like security, electricity and water.
President Uhuru Kenyatta on Saturday took a cautious approach to the pandemic, warning that relaxing measures such as curfews and containment of certain counties by just 20 percent would lead to 200,000 infections and 30,000 deaths by December.