Precision Air extends loss by Sh8bn

Dar es Salaam. Precision Air Services has extended its annual losses by 9 per cent to Sh91.6 billion. But it is optimistic that it will turn around its fortunes.
The company widened losses to Sh91.6 billion in the year to March 31, 2016 compared with Sh83.8 billion recorded during the previous period, according to its audited financial statement published yesterday.
The company said the weakening of the shilling against major currencies resulted in an increased forex loss of Sh28.7 billion.
The financing costs also increased by Sh6.6 billion compared with the period before despite the fact that the airline had no new borrowing.
“These results were achieved in an extremely tough aviation context in which airlines are confronted by unpredictable currency fluctuations, volatile fuel prices and insecurity.

An industry forecast by IATA indicates that African carriers will continue to make losses in 2016 even with the overall improvement in performance. Indeed the biggest challenges yet to come will be the authorities’ imposition of additional charges and the charging of VAT on leased aircraft,” said Precision Air chief executive officer Sauda Rajab.
The group turnover for the year was reduced by 16 per cent as a result of aircraft undergoing maintenance and awaiting engine overhauls. The company was only able to fly 374, 877 Passengers compared with last year’s 451,769 as cash flow constraints impaired the airline’s ability to simultaneously overhaul 13 engines. This reduced the availability of serviceable aircraft on average during the past financial year to only four planes for scheduled operations compared with the previous year.
However, the firm said it was progressing towards recovery after it recorded a more than 50 per cent drop in operating loss from Sh53 billion to Sh25 billion.
“Michael Shirima and Kenya Airways in their capacity as major investors in PW have expressed their satisfaction and strong support of the company’s turnaround progress, and continue to be closely involved with the process. They have affirmed their commitment to continue being major stakeholders in the company over the long term,” the airline commented in the statement.