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Kenya Airways totters after declaring colossal loss

August 4, 2015 Aviation, Headline News No Comments Print Print Email Email

egtmedia59From being one of Africa’s foremost airlines, styled “The Pride of Africa”, Kenya Airways has become one of the world’s worst-performing carriers.

The airline, partly government-owned, was a source of national pride – until it declared a pre-tax loss of USD 293 million for the 2014-2015 year, its worst result ever.

Investors say the enormous loss makes a state bailout inevitable, if the collapse of the airline is to be avoided.

Kenya Airways

Local politicians allege mismanagement of the national carrier, Africa’s fourth largest by passenger capacity, and some even suggest the losses may be part of a plot to sell off the carrier cheaply, Big News Network reports.

The mantle of Africa’s golden airline, once bestowed on Kenya Airways, has passed to fast-growing Ethiopian Airways, which has more routes compared with Kenya Airways and is performing well.

Some of the woes afflicting Kenya Airways stem from a slump in tourism to Kenya and surrounding countries, triggered by terrorism fears and the threat of Ebola. In Kenya’s case the Ebola threat is a furphy – there have been no cases in Kenya. But a statement by the UN World Health Organisation (WHO) last year, classifying Kenya as a “high-risk” country for the spread of the virus, created a shock wave.

Islamist terrorism, largely from extremists linked to Al Shabaab, a militant group in Somalia opposed to the Somali government, is a definite threat in Kenya. Western countries, including Australia, have issued advisories about it.

Analysts also attribute Kenya Airways’ current problems to poorly timed expansion, hot competition from Middle Eastern airlines like Turkish Airlines, Emirates, and Gulf Air, plus a miscalculated hedge on fuel prices.

Written by Peter Needham

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