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April 20, 2024
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Troubled flag carrier Kenya Airways continued to claw back territory during the first half of 2022, posting a 76 percent increase in revenue and reducing the loss position by 31.5 percent. The carrier says “pent-up demand and the removal of travel restrictions” have positively impacted operations, resulting in “a strong and sustained recovery in trading performance compared to a similar period in the prior year.” Kenya Airways clawing back lost territory.

Financials for the six months to June 2022 released at a virtual investor briefing on August 24 show group revenues totaled Kshs 48,104 million, a 76 percent increase relative to the comparable for 2021. The operating loss improved from Kshs -7.3 billion last year to Kshs -5.0 billion in 2022. The comprehensive loss was Kshs -14.979 billion versus Kshs 9.680 billion in HY1 2021, which was caused by a Kshs 5.1 billion loss on exchange differences on borrowings and lease liabilities. The increase in overall revenues comes on the back of a 109 percent growth in passenger revenue while revenues from 34.8 tonnes of cargo increased 16 percent on a 39 percent increase in tonnage.

Chief executive Allan Kilavuka attributed the loss to a spike in fuel costs (which increased to Kshs 11.1 billion) , exchange rate fluctuations, and higher finance costs. “The industry is experiencing recovery. Our focus is to ensure that we strengthen our operational resilience through innovation and diversification to deliver great and reliable services to our customers. We have transformed the airline during the pandemic, enabling us to emerge with renewed strength, underpinned by a product, network, and service that customers value,” Kilavuka added. In July, Kilavuka was bullish about the airline’s progress made during the rationalization of its business.  

Passengers carried up by 85 percent

Some 1.61 million passengers were carried during the reference period, representing an 85 percent improvement compared to 0.87 million passengers carried during the prior period. The numbers are still 33 percent below the 2019 baseline.

“The opening of borders worldwide has led to quick rebounds in some key markets. Lingering travel restrictions in some markets have limited the recovery. It is also important to note that these results were further affected by the high price of aviation fuel which is over 65 percent more than last year. If we adjusted for the fuel price spike, the operating profit for the period would have been Kshs 1.5 billion,” Board chair Michael Joseph said.

For the rest of the year, the airline is focused on improving staff productivity and optimizing the network and fleet, while continuing to look at cost reductions. This includes the renegotiating or termination of lease rentals. Kenya Airways expects a Kshs -0.7 billion net loss for 2022, while capacity in available seat kilometers (ASK) is expected to recover to 75.2 percent of 2019 levels.

Michael Wakabi
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