Kenya Airways plane being taxied to the runway at Jomo Kenyatta international Airport. [ photo / Hivisasa ]
African airliners have been projected to close next year with net losses amounting to $100 million (Sh10.3 billion) due to slow economic growth across the region that has been coupled by poor infrastructure and high taxes.
According to the International Air Transport Association (IATA) , most African airliners have been recording an increasing passenger booking that has yielded nothing as their sustained failure to fill the planes continues to eat into the revenues.
“While traffic is growing, passenger load factors for African airlines are just over 70 per cent, which is 10 percentage points lower than the industry average,” said IATA’s Director General on Tuesday, during an industry briefing in Geneva, Switzerland.
Mr. Juniac added that a stronger forecast in the economic growth across the region was expected to support demand growth of eight per cent in 2018, slightly outpacing the announced capacity expansion of 7.5 per cent.
However, the IATA's latest forecast does not bode well with the Kenyan Airways and the South African, as they have struggling to recover from huge looses that had rendered them insolvent to profitability.
Kenya Airways had recorded a 25 per cent improvement in the net loss to stand Sh 38 billion on the lower cost for the six months to September. It also recorded a revenue drop of 0.4 per cent to close at Sh54.52 billion as compared to Sh54.75 billion recorded in similar period last year.
The airliner was however boosted this year after the government and 10 other banks agreed on debt restructuring process that would see the debt owned by Kenya airways transformed to shares.