Airlines Brace for Sh424 Billion Loss in Revenue This Year

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The losses in the aviation sector are expected to hit $3.5 billion (Sh424 billion) this year despite a majority of airlines resuming full operations.

Latest industry figures show that the projected revenue loss due to COVID for the third quarter of 2022 is approximately $800 million (Sh96.87billion)

Data from African Airlines Associations (AFRAA)-a trade association of airlines, show that revenue loss for 2022 to be $3.5 billion (Sh424 billion), equivalent to 20 percent of 2019 full year revenues.

“African airlines have now resumed operations to 99.2percent of routes operated before the pandemic.  Eight African airlines have exceeded the number of international routes they operated before COVID,” AFRAA said in the monthly report.

In September, traffic and airline capacity deployed reached 82.52 percent and 82.1 percent of the 2019 level respectively.

Domestic market share is now at 39.5percent capacity and 32.8percent percent of passengers carried while intra-Africa passengers carried represented 29.5 percent and corresponding capacity at 24percent. Intercontinental traffic this month is 37.6percent and capacity 36.5percent

The expected losses have prompted several continental airlines to restructure their operations.

Kenya Airways has reduced its fleet by two more planes as part of cost-cutting measures seeking to steady the loss-making airline.

Latest data shows that the national carrier’s fleet size narrowed in the last nine months to 41 aircraft from 43 in December 31, 2021, after two leased Embraer 190 aircraft were surrendered following expiry of lease.

The company booked a half year loss of Sh5.3 billion on hedged foreign exchange differences. Jet fuel, which was the largest contributor of overheads in the half-year period, pushed overall operating expenses to Sh53. 1 billion from Sh34 billion.

The International Air Transport Association recently said that, despite continued uncertainty, the number of passengers carried by all airlines worldwide will reach 83 percent of pre-pandemic levels in 2022.