in

KQ risks Sh14bn refunds for unused flight tickets

Companies

KQ risks Sh14bn refunds for unused flight tickets


kq-Dreamliner0504FA

A Kenya Airways aircraft at JKIA. FILE PHOTO | NMG

victorjuma_img

Summary

  • Kenya Airways risks paying Sh13.9 billion in refunds to customers for unused tickets bought last year, mainly due to cancelled flights in the wake of the Covid-19 pandemic.
  • This could see the national carrier revise its revenue downwards, according to disclosures made by the company’s external auditor PricewaterhouseCoopers (PwC) for its financial year ended December.
  • The airline, like its peers across the world, is now asking customers to accept vouchers which allow them to travel in future, while conserving the much-needed cash to remain afloat, instead of making refunds.

Kenya Airways risks paying Sh13.9 billion in refunds to customers for unused tickets bought last year, mainly due to cancelled flights in the wake of the Covid-19 pandemic.

This could see the national carrier revise its revenue downwards, according to disclosures made by the company’s external auditor PricewaterhouseCoopers (PwC) for its financial year ended December.

The airline, like its peers across the world, is now asking customers to accept vouchers which allow them to travel in future, while conserving the much-needed cash to remain afloat, instead of making refunds.

Passenger ticket sales are accounted for as current liabilities and later recognised as revenue when customers fly or the ticket expire.

PwC says that the option of letting the tickets expire is largely shut out because of the unique challenges caused by the pandemic.

“In the current year, management have expressed significant judgments in relation to recognition of revenue on unused tickets in view of extensions in ticket expiries and refund options offered to passengers as a result of the Covid-19 disruption to the aviation sector,” PwC said in its report.

The Sh13.9 billion in unused tickets represents 26.3 percent of the Sh52.8 billion…

Read further.

Despite big travel numbers, airlines aren't roaring back yet - Erie News Now

Australia news live: Morrison stirs debate over international travel, Google may appeal against location data ruling | Australia news

Javed Latif should apologize for ‘Pakistan Khappay’ remarks

Walled city project will help to promote tourism