Kenya Airways staring at Ksh13.9 billion refunds for unused tickets

Kenya Airways
A Kenya Airways plane. [Photo: courtesy]

Kenya Airways is staring at 13.9 billion in unused tickets for 2020.

Most customers had paid for the air tickets in advance but did not use them due to the Covid-19 pandemic which struck in March according to PricewaterhouseCoopers (PwC) which is the external auditor for the airline.

Air tickets account for 26.3 of KQ’s revenues under review by PwC.

“In the current year, management have expressed significant judgments in relation to recognition of revenue on unused tickets in view of extensions in ticket expiries and refund options offered to passengers as a result of the Covid-19 disruption to the aviation sector,” PwC said in its report according to Business Daily.

KQ has fallen back to issuing vouchers to her customers in a bid to keep the money.

A voucher allows a passenger to fly at any time in future without paying a second time. This is a strategy that has been adopted by many airlines across the world whose revenues were depressed by Covid-19 pandemic.

If the airline issues refunds, its dicey financial position is likely to take another tumble as it is already reeling in losses due to loss of business for the last on12 months ending in March 2021.

KQ’s flight cancellation is not an isolated case as other airlines across the world have been forced to cancel flights due to the unprecedented nature of Covid-19 which keeps on mutating.

Vouchers are the fallback plan for these airlines.

The International Air Transport Association (IATA) says that over one million flights have been cancelled in the last one year across the world.

“The Covid-19 crisis has caused airlines to cancel more than one million flights globally,” IATA stated.

It added: “This changed the way airlines process refunds or offer credit for future flights. IATA has launched several activities to assist the industry efficiently address the customer vouchers and refunds topics.”