(Posted 30th January 2023)
Kenya’s debt stricken national airline, Kenya Airways, has once again been compelled to issue a profit warning for the just ended Financial Year 2022 (01st January to 31st December 2022).
Financial analysts say that means that the losses for the year 2022 will at least be 25 percent higher than the losses incurred in 2021, which stood at nearly 16 billion Kenya Shillings.
The Kenya government of President Ruto, in a departure from past near automatic bailouts, is actively seeking to offload its nearly 50 percent shareholding, aimed to find a strategic investor and turn the fortunes of the company around. The government has also indicated intent to stop bailouts and further cash injections effective Q4 of 2023, drawing a red line in the sand when it will be ‘make profit or go away’ for the financially stressed airline.
Notably has the current government however not yet sacked either board or management, both of which excelled in only one thing, accumulating mouting losses. The board chairman, one Michael Joseph, in fact attributed the sharp rise of losses to foreign exchange shifts of the US Dollar versus the Kenya Shilling.
All eyes will now be on the next announcement by the airline ahead of the Annual General Meeting, just how high the losses will be and what plan of action, to stem the financial bleed aand turn business fortunes around, they have, if any.