Monday, June 17, 2013

■ KENYA: Kenya Airways posts net loss of USD92million for latest Financial Year.

Kenya Airways
Kenya Airways (KQ) has posted a net loss of USD92million (KES7.86billion) for its 2012/13 Financial Year, compared with a profit of  USD19.39million (KES1.66 billion) a year earlier, Chief Financial Officer Alex Mbugua has announced. Losses were blamed on "harsh economic and geopolitical conditions" coupled with a global economic slowdown and volatile global oil prices.  The company last reported a loss in the fiscal year ended March 2009.

Kenya Airways

Commenting on the overall financial shape of his airline, Mr Mbugua said that, although the larger African markets remained buoyant, Kenya had witnessed constricted passenger traffic. The causal factor for this lull was the advisories issued against travel to the country by key market sources in the West due to fears of retaliatory attacks from the Somali Al-Shabaab terror group, together with the unpredictable electioneering process. 

In spite of the adversities mentioned above, Kenya Airways expanded its footprint into Delhi and Kilimanjaro during the first half of the year, and later re-opened Eldoret in October. However, in a bid to minimise losses the airline cut back capacity offered to Europe and suspended operations into Muscat, Jeddah and N’Djamena. The group achieved a turnover of USD1.16billion (KES98.9billion), down from USD1.26billion (KES107.9 billion) realized last year. This decline is largely attributed to constrained passenger traffic together with immense pressure exerted on yields. This resulted in KES7.9 billion loss after tax compared to 2011-2012 profit of KES1.6 billion. 

Total cargo tonnage grew by 17.8% compared to last year on account of the introduction of B747 freighter operations between China and Nigeria. Further growths within the network were driven by increased belly capacity offered by additional wide body services. The achieved yields however reduced by 2.6% against last year due to shift in sales focus to market the extra capacity availed. 

The Kenya Shilling's strengthened against the US Dollar with the average exchange rate for the year closing on KES85.02 per US Dollar against a prior year average of KES88.58 per US Dollar.  This shrunk the turnover reported in Kenya Shilling terms by KES4Billion given that a larger portion of revenues are US Dollar denominated. However, major operating cost elements denominated in US dollars, took some reprieve because of the strengthened Kenya shilling.

Kenya Airways 2012/2013 Financial Results Summarized:
- Figures For 2012/13 (% Change on 2011/12)
  • Net Results: - USD92.4million (-573%)
  • Operating Revenue:  USD1.16billion (-8.37%)
  • Operating Overheads & Costs: USD230.9million (-0.33%)
  • Finance Income: USD16.6million (+480%)
  • Passenger Carrying Capacity ASK:  13.397million (-)
  • Overall Passenger Traffic: 9.579million  (-3.6%)
Source [Kenya Airways]

Chief Executive Titus Naikuni said the airline was expecting to receive its first Boeing 787 aircraft in the first quarter of 2014, to replace its ageing fleet of Boeing 767-300s. "We expect our first Dreamliner to land in Nairobi in March 2014," he told investors, referring to orders whose delivery have been hit by several delays, impacting Kenya Airways' performance.

Kenya Airways is also looking at the possibility of opening a hotel in Nairobi to cut costs associated with putting up staff and passengers whose flights have been delayed.