Kenya Airways announces its operating profits in six years

Kenya Airways has announced its first operating profit in six years, reporting a profit of Ksh998 million.
The airline’s turnaround strategy is starting to show positive results, with increased revenues and improved performance.

“These exceptional figures underscore the airline’s outstanding performance and offer encouraging indications of ongoing recovery and turnaround initiatives that have been put in place by management to return the airline to profitability are bearing fruit,” said Kenya Airways Chairman Michael Joseph.
Compared to the previous year, Kenya Airways saw a significant improvement in operating profit, with a 120 per cent increase from a loss of Ksh5 billion. The company’s revenue also grew by 56 per cent to Ksh75 billion.

“These results confirm the operational viability of the airline. We have enhanced our customer experience at different touch points; the reliability and availability of our aircraft have significantly improved. Our On-Time Performance (OTP) has gone up from a low 58 per cent at the start of the year to 77 per cent at the end of June with a target of being above 80 per cent,” said Allan Kilavuka, Kenya Airways Group Managing Director and CEO.

The number of passengers increased by 43 per cent to 2.3 million, while available seat kilometers (ASKs) increased by 56 per cent.
Although operating costs increased by 40 per cent due to increased activity, the airlines gross profit increased by 131 per cent. Earnings before interest, tax, and depreciation (EBITDAR) also saw a 7 per cent growth.

“We are working to resolve the issue of the legacy debt in collaboration with our stakeholders and the Kenyan government. The debt is worsened by the 14 per cent devaluation of the Kenyan shilling against the dollar since January, which we have had to book as foreign exchange losses,” he stated.

He further said that the devaluation of the Kenya shilling has a significant negative impact on our financials as a majority of our transactions are carried out in the major foreign currencies.

“This has, in turn, an impact on our overhead costs, which have increased by 22 per cent,” added Kilavuka.
Kenya Airways plans to focus on recapitalizing the business to ensure long-term growth and stability.
The company aims to expand its network, optimize its fleet, and increase passenger and cargo capacities.
“Our focus looking ahead is on recapitalizing the business to place Kenya Airways on a stronger footing and provide a stable base for long-term growth,” he said.

Additionally, he said that they would continue networking the expansion and fleet optimization to increase passenger and cargo capacities.

“Further, we see a promising trend in forward bookings for the year’s second half. It all starts with a robust summer peak, particularly in July and August, where our load factors exceed last year’s,” said Kilavuka.

Overall, Kenya Airways’ recent financial results indicate positive progress and provide hope for the airline’s continued recovery.