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Kenya Airways blames tourism slump for record losses | Kenya Airways blames tourism slump for record losses |
(1 day later) | |
One of Africa's largest airlines Kenya Airways has announced its biggest ever annual loss. | One of Africa's largest airlines Kenya Airways has announced its biggest ever annual loss. |
It has partly blamed the $290m (£188m) shortfall on a decline in Kenya's tourism sector. | It has partly blamed the $290m (£188m) shortfall on a decline in Kenya's tourism sector. |
Some countries had issued travel advisories warning about terror threats in certain areas. | Some countries had issued travel advisories warning about terror threats in certain areas. |
Finance Director Alex Mbugua also told investors that the airline has been hit by competition from Gulf carriers, reports the Reuters news agency. | Finance Director Alex Mbugua also told investors that the airline has been hit by competition from Gulf carriers, reports the Reuters news agency. |
Competition from within the continent is also a factor, with Ethiopian Airlines becoming a major regional rival. | Competition from within the continent is also a factor, with Ethiopian Airlines becoming a major regional rival. |
Losses were forecast but these were "much worse that they were expected to be", African Aerospace magazine editor Alan Peaford said. | Losses were forecast but these were "much worse that they were expected to be", African Aerospace magazine editor Alan Peaford said. |
Tourism numbers are down because of the attacks in Kenya by Somalia-based militants al-Shabab, he added, but Kenya Airways has also been late in responding to the challenge of Ethiopian Airlines. | Tourism numbers are down because of the attacks in Kenya by Somalia-based militants al-Shabab, he added, but Kenya Airways has also been late in responding to the challenge of Ethiopian Airlines. |
Kenya Airways moved to upgrade its aeroplanes ordering its first Boeing 787 Dreamliners in 2013, some two years after Ethiopian Airlines. | Kenya Airways moved to upgrade its aeroplanes ordering its first Boeing 787 Dreamliners in 2013, some two years after Ethiopian Airlines. |
But the timing was unfortunate as it coincided with the tourism slump and the "growth of the fleet... was not matched by revenue growth," the airline's Mr Mbuga acknowledged. | But the timing was unfortunate as it coincided with the tourism slump and the "growth of the fleet... was not matched by revenue growth," the airline's Mr Mbuga acknowledged. |
Kenya Airways has also been hit by insuring itself against fuel price rises at exactly the time when prices have been falling. | Kenya Airways has also been hit by insuring itself against fuel price rises at exactly the time when prices have been falling. |
The airline is now looking for a $200m loan to help it through this period. | The airline is now looking for a $200m loan to help it through this period. |
In June, the UK government lifted its warning against travelling to part of Kenya's coast, including Mombasa. | In June, the UK government lifted its warning against travelling to part of Kenya's coast, including Mombasa. |
Correction 31 July 2015: This story has been amended to remove incorrect the statement that Ethiopian Airlines does not publicly declare its profits or losses. |
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