Kenya Airways has managed to reduce its full-year loss by 60.9pc. KQ announced Thursday that the company’s loss had dropped to Sh10.2 billion, giving investors some hope after years of increased losses.
The company attributes its strides to deep cost-cutting. “Our operating costs reduced significantly due to the turnaround efforts. We posted an operating profit of nearly Sh900 million compared to a Sh4.1 billion loss last year,” KQ chief executive, Mbuvi Ngunze, said when releasing the results.
However, the upturn was overshadowed by a Sh10 billion decrease in its turnover to Sh106 billion, as the airline’s book value shrunk Sh9.2 billion more into the negative to Sh44.9 billion.
KQ’s operating costs dropped by Sh14.9 billion to Sh105.4 billion.
“We are seeing the first results of our investment in the turnaround,” Mr Ngunze said.
KQ managed to cut costs by subleasing three Boeing 777s, two Boeing 787s and selling two Boeing 777s. This brought the company’s costs down by Sh14 billion to Sh15.5 billion.
The company also retrenched a large number of workers and saw many staff leave at will. A total of 288 staff had left the company at the close of the period. The current number of KQ employees stands at 3,582.
“The results are really positive. We have gone through some really tough times but we are coming out. The efforts put in by the KQ management are starting to bear fruit in terms of our operations,” said Michael Joseph, KQ’s chairman.
Operation Pride is 72 percent complete according to the company’s estimate, with balance sheet restructuring as the only major issue remaining. The operation is led by US consultancy McKinsey.