KQ reports Ksh998M operating profit for the first time in 6 years
By Francis Muli, August 29, 2023
National carrier Kenya Airways (KQ) has recorded Ksh998 million in operating profits for the first six months of 2023, the first profit for the carrier in six years.
The profit is a 120 per cent improvement in operating profit from a loss of Ksh5 billion reported in the same period in 2022.
In a statement, KQ said that the improvement was realized through passenger charters, ramped-up scheduled operations, partnerships with other airlines, lease rentals renegotiations and other cost-reduction measures.
“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,” KQ chairman Michael Joseph said.
Weak shilling’s impact to KQ profits
The airline however recorded a Ksh 17 billion impact on foreign exchange losses on monetary items, loans and leases, giving rise to a loss before tax of Ksh22 billion.
“The debt is worsened by the 14 per cent 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,” KQ CEO Allan Kilavuka said.
“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% at the start of the year to 77% at the end of June with a target of being above 80%.”
KQ’s revenues grew to Ksh75 billion, a 56 per cent increase compared to the same period last year. The carrier recorded a growth in the cabin factor by 76.1 per cent, with an increase in passenger numbers of 43 per cent to 2.3 million.