Kenya Airways has reported improved financials for the first six months ended September 30 by cutting its losses by 60% to Ksh 4.8 Billion from a loss of Ksh 12Billion. Operating profits surged by 143.6% during the period to Ksh 0.9 Billion compared to an operating loss of KSh 2.2 billion in the prior period.
Passenger numbers increased by 89,000 to 2.2 million with the airline attributing this to lower operating costs due to fleet rationalisation in line with the recovery strategy dubbed ‘Operation Pride’.
The airline’s overheads increased by 14.5% to 12.5Billion largely as a result of investment costs in regards to the Operation Pride Project. However, it reduced its direct operating costs by KSh 2billion to KSh 32.8 billion with fuel costs declining by 17.2%.
KQ CFO also noted that they have not entered into any Fuel hedging contract for the last 12 Months, saying that the current contracts will expire by the end of this month. The CFO also added that they will continue to hedge fuel arguing that this was a risk management tool.
The airlines total turnover reduced by 3.5% to Ksh 54.7 Billion on the back of reduced capacity. However, cargo revenue reduced by 21% with the management saying the airline uplifted less tonnage during the period due to decrease in wide body capacity.
On Operation Pride, the airline said that it had implemented 229 initiatives out of the 540 with the full outcome expected within 18 to 24 months.
Kenya Airways CEO Mbuvi Ngunze said: “Across Africa we faced the challenge of currency fluctuations and a changing market environment driven by lower commodity prices. Kenya Airways has continued to be resilient despite these challenges managing to achieve improved results.”
Source: The Kenyanwallstreet