Kenya Airways has cited the Ebola crisis, terrorism and a “challenging business environment” as reasons why it has posted record losses and facing a potential government bailout.
In its financial results published this week the African carrier showed its pre-tax loss had grown from 4.86bn Kenyan Shillings (Kshs) ($48million) to Kshs29.71bn ($293million), for the year ending March 31.
Despite the huge losses the airline increased its passenger numbers last year from 3.7 million to 4.2 million.
Kenya Airlines has also announced it has struck an agreement with Afrexim Bank to act as a financial advisor for an “optimal funding structure” and to provide a $200 loan.
Gross profit at the airline was KS8.2bn, a decrease of Kshs10bn, year-on-year, but a decrease of Kshs3.1bn excluding one off impacts.
The airline said that investments in new aircraft including five 787Dreamliners have “coincided with a difficult business environment driven by the incidences of terrorism in the region together with adverse external factors like West African Ebola crisis and the effects of travel advisories.”
It added these factors had a “negative effect on the Kenyan tourism and aviation sector”.
Kenya Airlines was privatised in 1996 and is partly owned by Air France-KLM. The government owns around 28 per cent.