National carrier Kenya airways announced a Sh26.2 billion loss on Thursday 21, 2016, which is the highest loss ever recorded by a Kenyan company.
This loss was attributed to accelerated interest expenses, foreign exchange losses and interest expenses.
In 2015 the company posted Ksh 26 billion loss, which prompted the management to consider restructuring the operations in order to increase the efficiency.As a result, more than 600 employees could lose their jobs.
Even so, the company’s revenue increased to Sh116.1 billion from Sh110.1 billion in 2016, trailing the increase in costs. The loss also saw the national carrier set a new record in wiping out shareholders’ equity, with the company’s net worth now at a negative Sh35.6 billion from the previous negative Sh5.9 billion.
The airline is facing stiff competition from Ethiopian airline and other local companies which charge reasonable prices for the air ticket.
Since Kenya Airways Group Managing Director & Chief Executive Office Mbuvi Ngunze took charge of the company, the carrier has never recorded a profit. The former Chief Operating Officer has faced pressure from the staff to surrender the position, but has remained put.