Kenya Airways releases HY 2021 results

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National carrier Kenya Airways PLC (KQ), has released its financial results for the six-month period ending June 2021, at a virtual investor briefing held this afternoon.

During the first half of 2021, operations continued to be severely impacted by the COVID-19 crisis, resulting in depressed half-year results. The airline however recorded improved performance compared to a similar period in the prior year.

The Group’s total revenue during the period reduced by 9% to Kshs. 27,354 million (£181 million). The reduction is due to the cessation of domestic scheduled operations in the month of April 2021, as well as travel restrictions, and lockdowns due to a surge in virus cases in key domestic and international markets including UK, India, China, UAE, and the US.

Reduced frequencies

Prior to the pandemic, the carrier flew to over 40 African destinations. Currently the airline operates in 40 international destinations and two domestic routes with significantly reduced frequencies of approximately 65% as compared to 2019. COVID-19 restrictions on travel by various states remain the biggest challenge. In addition, the rollout of the coronavirus vaccines in the African continent remains low; with less than two per cent of Africans having received the vaccine while in other markets high vaccination levels have allowed progressive reopening of their economies.

The current upsurge coupled with the continent’s low vaccination rates has contributed to low passenger traffic from Africa to other markets like Europe who have issued or extend stringent travel restrictions on travellers from African countries in a measure to prevent the spread of the new COVID-19 variants. As a result, a total of 0.8 million passengers were uplifted during the first half of 2021, a 20% decline in comparison to a similar period in the previous year.

Strong focus on freighter operations

Though passenger revenue declined by 17% to Kshs. 20,230 million (£133 million), cargo revenues went up by 60% due to strong focus on freighter operations. The Group has been able to uplift an increased 500 tonnes monthly, showing its cargo division’s outstanding agility in adapting its operations to provide air freight services in this new environment.

Kenya Airways board chairman Michael Joseph say: “During the period, the company’s main focus was, and still is cash conservation. The company has exploited opportunities of raising much needed revenue through passenger charters and ramped up cargo operations. Other initiatives undertaken by management include partnerships with other airlines, lease rentals re-negotiations, payment plans with suppliers and partial deferment of staff salaries.”

According to IATA, Q1 2021 results show that the start of the year was still very weak for the airline industry, as virus outbreaks paused air travel recovery in many important markets. Faced with long recovery prospects, diminishing revenue occasioned by reduced demand in passenger business, and increased costs due to tighter health and safety measures, the business focus for the rest of 2021 will be ensuring the survival and the rebound of the company.

Kenya Airways Group managing director and CEO, Allan Kilavuka said: “Notwithstanding the current global crisis brought about by COVID-19 pandemic, we will continue to adopt an agile approach in responding to the current dynamic marketplace. Our focus is on business recovery and to continue contributing to the rebuilding of economies and communities impacted by the pandemic. Restoring customer confidence for business and leisure travel will be key to growing demand, as well as creating agile and nimble business models that are sustainable and responsive to the customer’s needs.”