Airline Business

KQ May Lose Up to 76% of Travel Market by December

Kenya’s national carrier, Kenya Airways (KQ), may lose up to 76% of its passenger market by December 2020, owing to the coronavirus pandemic. This statement was made during a webinar by the Ministry of Tourism on Thursday.

According to the airline’s CEO, Allan Kilavuka, a greater portion of travelers, about 55-65%, usually travel for leisure. However, with the pandemic and the travel restrictions in place, only business travelers are more likely to use the airline leading to a decline in revenues.

Furthermore, the need to create a safe distance between passengers will result in fewer seats and subsequently lead to higher cost of air tickets thereby discouraging travel.

The drop in passenger flights saw the carrier resort to cargo business. The cargo business made KSh214 million revenue in April.

Kenya Airways has requested the National Treasury for KSh7 billion emergency funding for the maintenance of the grounded aircraft, payment of staff salaries, and settlement of utility bills like security, water, electricity, and parking fees.

In February, the government pumped a KSh5 billion commercial loan into KQ so as to complete the scheduled engine overhaul program on its E190 Embraer fleet.

Elsewhere, Africa’s largest airline, Ethiopian Airlines revealed it has lost nearly $550 million since 2020 began due to the pandemic. The company is running cargo flights and charter flights which account for only 15% of its revenue.

Globally, various airlines are asking for state bailouts amid the pandemic. The International Civil Aviation Organization (ICAO) estimates that airlines worldwide could face losses amounting to $253 billion by September this year due to COVID-19. By that time, airline passengers will have reduced by 1.2 billion.

Article by Eunniah Mbabazi

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