On Wednesday, the Kenya Airways’ share price crashed to Sh 0.97 at the Nairobi Securities Exchange (NSE). The pressure from international travel restrictions and airlines’ financial distresses have contributed to its drop.
A comparison to the previous day shows a 6.73% drop.
Analyst has pointed out that the airlines will likely continue to be affected due to the coronavirus pandemic.
“Globally, a number of airlines are struggling. KQ revenues are expected to drop; hence investors are selling stocks. Losses are also expected to be very high this year,” said Sarah Wanga, head of research AIB Capital.
“The stock has been trading on a spectacular basis. Negative impact on international travel restrictions and local containment measures have elevated negative sentiment on the stock,” said Churchill Ogutu, Genghis Capital head of research.
KQ has received a blow after a freeze on international passenger travel due to the global pandemic that has left the company with cargo as the only source of revenue.
Also, the 283 cabin crew taken to a mandatory quarantine forced KQ to ground some of its cargo planes due to the reduced number of flight staff. This increased KQ expenses by more than Sh 80 million.