National carrier, Kenya Airways, has announced that its earnings for the year ending 2019 are expected to go down by 25 per cent or more compared to earnings reported in 2018.
This, according to KQ Board Chair Michael Joseph, is based on the forecasted results for the year ending December 31.
In a profit warning to investors, the troubled carrier attributed the loss to stiff competition.
“Although Kenya Airways realised improved revenue growth in the year, profitability was constrained by the increased competition in the airline’s area of operations which, in turn, has increased pressure on pricing in order to remain competitive,” said Michael Joseph.
Last year, the company reported Ksh7.5 billion loss.
This then means that KQ will record a loss higher than Ksh7.5 billion by the end of this year.
KQ has been experiencing dwindling fortunes since 2012 despite efforts to improve earnings.
Reports indicate that fuel, personnel and cost of aircraft contribute to about two-thirds of the airline’s operating costs.
The profit pronouncement comes two days after the KQ board appointed Jambojet’s CEO Allan Kilavuka as acting CEO following the resignation of Sebastian Mikosz in May.
Kilavuka’s appointment takes effect starting January 1, 2020. He will serve in the role until a substantive CEO for the carrier has been recruited and appointed.
“Allan will also continue his role as Chief Executive Officer of Jambojet during the interim period of recruitment,” a statement signed by Company Secretary Catherine Musakali released on Monday reads in part.
Mikosz, whose contract was supposed to lapse in June 2020, took over from Mbuvi Ngunze in June 2017.