Sometimes last year I had an argument with crazydude on the state of financial affairs at KQ. The argument ended with me being called unapprised on KQ matters. I challenged him and told him this project mawingu thing is a mirage. Anyway, we didn’t have to wait for long for things to come out. And they are coming out thick and fast. The CEO admitted that they are paying salaries through loans (not even overdrafts!!). Today’s business daily news is that KQ is not remitting pilot’s deductions for loans to the banks. I guess the money deducted from pilots was used to pay off creditors. Half year 2014 results show KQ made pre tax loss of 12billion. A profit warning has already been issued.
Operation-wise, things are not getting any rosy for KQ. On the African front, Ethiopian Airlines (Africa’s biggest airline by revenue and profit) is in talks with governments of South Sudan, Rwanda and DRC to purchase stakes in their carriers. If these deals go through, this will be an onslaught on KQ’s African dominance. They will be forced to reduce fares on routes they have long capitalised on e.g Juba-Nairobi
And where are the Dreamliner birds that were acquired? Have some been leased out?
last year was a bad year for KQ with the fire outbreak. Ethiopia airlines are highly subsidized by the govt and I think our govt should do the same. That way KQ can reduce fair and be competitive again.
Ukisema Mambo ya Mumias nasikia kulia, my cane was harvested in in May last year, gross amount kwa statement ni Kshs 123,691.00, deductions, Kshs 140,732.00, net, nadaiwa Kshs 17,041.00. Na miwa imakaa kwa shamba 19 months.
On the KQ issue, it is purely mismanagement and haphazard growth. Buying dreamliners kama peremende, yet you haven’t even utilized 50% of the existing capacity is just… stupid. A loss of 12bn can not be acceptable. That’s a loss of over 30m daily!
As a matter of fact it is impossible to turn around Mumias sugar Company, because of low returns, 50% of the farmers have uprooted their cane and resorted to alternative forms of farming, now Mumias sugar relies 90% out grower cane, even if the government pumps in 5bn like it is being rumored, they don’t have enough cane to crush. Hizi shida zote, zililetwa na Kidero.
Same case with KQ, messing up and taking off while you are still ahead. Kidero milked the company through Capital projects which were not helpful to the company, he started with a perimeter wall fence around the estates which ran into billions, then he went to tarmacking roads around the estate, then the Tarda project, when Tarda failed to take off he went for the Water bottling plant and production of ethanol. Now he is vastly wealthy at the expense of the poor farmer.