Kenya Airways has in a statement indicated that it expects a 25 per cent drop in profits for the financial year ending 31 December 2019.
According to the board, despite improved revenue growth in the year, the airline has witnessed intensified competition in its area of operations. This has I turn led to increased pressure on pricing in a bid to remain competitive.
The airline also indicated that the adoption of new International Financial Reporting Standards (IFRS) 16 rules in 2019 has led to a drop in the profits. This is because the rules require significant adjustments to both the profit and loss statements and balance sheets for the financial year.
The troubled airline’s net loss for the first half of 2019 increased to KSh8.5 billion, up from KSh4 billion recorded in the first six months of 2018.
This comes at a time when the airline has named Allan Kilavuka as the acting CEO, this is after Sebastian Mikosz tendered his resignation effective December 2019. Allan will continue with his role as the CEO of Jambojet, a subsidiary of the national carrier.