Kenya Airways PLC (KQ) has posted a Ksh998 Million operating profit for the half year ended June 30.
This is a 120 per cent jump in operating profit compared to the Ksh5 billion loss the national carrier recorded in a similar period the previous year.
KQ’s operating improvement is backed by a growth in the cabin factor to 76.1 per cent, with an increase in passenger numbers to 2.3 million, up 43 per cent.
It is the first time KQ is reporting operating profit in 6 years after it has been struggling and relying on the government for bail-out.
In the period under review, the group’s revenue grew to Ksh75 billion, recording a 56 per cent increase compared to a similar period a year before.
The national carrier mainly focused on improving the customer experience, operational excellence, and cash conservation during the review period.
KQ also exploited other opportunities to raise much-needed revenue through passenger charters and ramped up scheduled operations.
In addition, the pride of Africa’s management also inked partnerships with other airlines, leased rentals renegotiations and employed other cost-reduction measures to boost its performance for the year ended June.
“These exceptional figures underscore the airline’s outstanding performance during the period 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 KQ’s Chairman Michael Joseph.
Moreover, KQ’s improved performance was negated by a Ksh17 billion impact on foreign exchange losses on monetary items, loans and leases, giving rise to a loss before tax of Ksh22 billion.
“These results confirm the operational viability of the airline. We have enhanced our customer experience at different touchpoints, the reliability and availability of our aircraft have significantly improved, and 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 the airline’s Managing Director (MD) and CEO Allan Kilavuka.
He further noted that the legacy debt and the weakening of the Kenya shillings against major currencies are two concerns that continue to hold back the airline.
“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% devaluation of the Kenyan shilling against the dollar since January, which we have had to book as foreign exchange losses.”
“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.