KQ flies back to profit after a 10-year descent
National flag carrier Kenya Airways has reported Kes513 million in earnings for the six months ending June 2024, soaring from Kes21.7 billion losses which the company flew into during a similar half in 2023.
According to CEO Allan Kilavuka, the strong performance reflects a key milestone in the airline business which has been under insolvency since 2018. He noted that this is the first time in over 10 years that Kenya Airways has announced a profit before tax and after tax.
“The company also exploited opportunities of raise the much-needed revenues by ramping up its scheduled operations as well as through passenger charters. Other initiatives undertaken by the management included partnerships with other airlines and cost containment measures,” Mr Kilavuka explained.
In a statement, KQ explained that despite facing a Kes24 billion in foreign exchange losses on monetary items, loans, and leases, “this year’s performance marked a major milestone in the Group’s turnaround strategy.”
KQ managed to achieve a notable improvement, with a loss before tax of Kes22.7 billion, marking a huge step from the Kes38.3 billion loss suffered in the previous financial year of 2022.
In the half, Kenya Airway’s income increased by 22 percent to close the period at Kes91.49 billion even as operating profit went up by 30 percent to Kes1.3 billion.
At the same time, company disclosures show that business costs contracted by 22 percent to close the half at Kes90.2 billion.
Additionally, the Group reported a 37 rise in total operating costs despite a 44 percent increase in capacity deployed, attributable to high cost of operations as the airline bounced back from the Covid-19 fallout.
At the same time, direct operating costs increased by 48 percent on acount of higher capacity during the half. What’s more, overheads went up by 22 percent in what the company said was due to the increase in employee costs as well as forex losses triggered by devaluation of the Kenya Shilling against major world currencies, especially the US Dollar.
Kenya Airways Chairman, Michael Joseph said, “These figures highlight the airline’s remarkable performance over the year and provide encouraging signs of continued recovery within the air transportation sector. They also confirm the operational viability of the airline business and demonstrate that the management’s ongoing efforts to restore profitability are yielding positive results.”
Looking ahead, the CEO noted that the business will engage the government with a view to secure funding, “to place Kenya Airways on a stronger footing and provide a stable base for long-term growth.”
