Kenya Airways sees revenue decline

Bloomberg

Kenya Airways Ltd. expects second-half revenue to decline after violence during the country’s protracted presidential elections scared off passengers, Chief Executive Officer Sebastian Mikosz said.
Travellers cancelled bookings as a rerun of the vote and court disputes over the outcomes stretched over three months, Mikosz said in an interview
in the Mauritian capital,
Port Louis. The impasse triggered violence that left at least 80 people dead, according to human-rights groups.
“We forecast a big impact in terms of revenue,” Mikosz said. “We are going to have a huge impact on the second half due to the fact that there were several weeks of uneasiness.”
The drop in income comes
as Sub-Saharan Africa’s third-biggest carrier pursues a turnaround plan to return to profit after it posted a record loss last year. The airline completed a reorganisation that resulted in Kenya’s government increasing its stake to 48.9 percent from 29.8 percent, and domestic lenders owning 38.1 percent after a debt-for-equity swap.
KQ, as the company is known, has begun talks with lenders about renewing its hedging strategy to offset the impact of rising fuel costs, which represent about a third of the airline’s total expenses.
Oil prices are heading for a second yearly gain as the Organization of Petroleum Exporting Countries and its allies including Russia extend output cuts through the end of 2018.
“We have been using the hedging products in the past,” Mikosz said. “The products expired roughly three months ago. What we want, now we are in post-restructuring, is to start talking hedging again.”
Kenya Airways posted a first-half loss of 3.8 billion shillings ($37 million) in November, compared with 4.78 billion shillings a year earlier, after revenue dropped 0.4 percent to 54.5 billion shillings.
Kenya Airways shares fell 0.3 percent to 17.70 shillings, its first decline this month. The stock has tripled in value this year after a share split
last month.
Mikosz was in Mauritius to sign a letter of intent with Air Mauritius Ltd. to boost collaboration between the two airlines.