May 4 , 2015 In Kenya, Kenya Airways is taking proactive steps to bridge losses caused by a fall in flights. Chief executive Mbuvi Ngunze has said the company plans to sell some older planes and land, and is negotiating a bridging loan to help it through a cash crunch caused by a drop in passenger numbers.
“We did not have a summer and therefore we reported a result that was not to our expectation and we took certain decisions first of all to reduce capacity, selling assets and we are in the process of that. We also announced about a new financing plan because we needed to refinance our business from short-term reliance to medium-term reliance where we can look at the long-term financing plan and that is what we are working on today,”
The company reported first-half losses of 12.5 billion shillings ($134 million), while passenger numbers were down to 64 percent of capacity in the period from 69 percent in the prior year period.
Ngunze, who took over in 2014, told Reuters the airline was selling four Boeing 777-200 planes, a Boeing 767and some land it owns to help cut its debt profile. He also said the air carrier has a fundraising target in terms of the assets.
“We said at the half year that we have gone out into the market and we are getting a bridge loan — bridge finance for a period of time to allow us to work with the financial advisor to look at what is a long-term financing structure of the business both in terms of long-term debt and or equity,”
The CEO is however optimistic that these issues will be temporary and that it will soon be business as usual for the airline
“Today we are focused on making sure that one — we are commercially and financially efficient and that’s why we are focusing on the commercial side of the business to make sure we are taking all the opportunities we can, even in a difficult commercial space with security concerns around us, and looking for the financial efficiency through some initiatives that I have told you. I think there is opportunity in the business there is a market for Kenya Airways the point is that it will probably transition and it will take a bit of time,”