Kenya Air­ways cuts half-year loss by 60%

The com­pany recorded a 4.2% in­crease of pas­sen­ger num­bers to 2.2 mil­lion, but rev­enues dropped 3.5% to Sh54.74 bil­lion

The Star (Kenya) - - News Business - RICHARD MUNGAI @Richiy­mungai

Kenya Air­ways half-year loss has nar­rowed by 60 per cent, hint­ing at a pos­si­bil­ity of suc­cess in a turn­around strat­egy adopted by the air­line a year ago.

KQ yes­ter­day re­ported that af­ter-tax loss for the half-year pe­riod ended Septem­ber 30 had dropped to Sh4.78 bil­lion from Sh11.95 bil­lion posted in the same pe­riod last year.

Chief ex­ec­u­tive Mbuvi Ngunze said the im­prove­ment was un­der­pinned by lower op­er­at­ing costs made pos­si­ble by fleet rationalisation in line with the re­cov­ery strat­egy ‘Op­er­a­tion Pride’ launched a year ago.

Half-year fi­nan­cial state­ments show di­rect op­er­at­ing costs re­duced by 5.8 per cent to Sh32.75 bil­lion from Sh34.79 bil­lion last year.

Fleet ownership costs re­duced by 35 per cent to Sh8.49 bil­lion from Sh13.14 bil­lion.

KQ recorded a 4.2 per cent in­crease of pas­sen­ger num­bers to 2.2 mil­lion, but rev­enues dropped 3.5 per cent to Sh54.74 bil­lion from Sh56.72 bil­lion.

“The key goal of Op­er­a­tion Pride is to im­prove our re­sults and we are on course,” Ngunze told an in­vestor brief­ing at the air­line’s head­quar­ters in Nairobi.

The turn­around strat­egy fo­cuses on clos­ing the prof­itabil­ity gap, re­view­ing the busi­ness model and op­ti­mis­ing the cap­i­tal of the air­line within 18 to 24 months.

KQ’s out­go­ing chair­man Dennis Awori, who made his last ap­pear­ance at the air­line yes­ter­day, said ‘Op­er­a­tion Pride’ has a huge po­ten­tial and would leave a le­gacy for him.

“I re­it­er­ate that KQ will re­turn back to be the pride of Africa be­cause of the mea­sures we have taken,” the former en­voy said.

Awori was suc­ceeded by Michael Joseph on Wed­nes­day fol­low­ing calls for ‘a clean up’ of the top man­age­ment who are blamed for the air­line’s poor per­for­mance.

Joseph, the former Sa­fari­com chief ex­ec­u­tive, was elected chair­man on grounds that his in­ter­na­tional ex­pe­ri­ence will help ac­cel­er­ate KQ’s turn­around. He will over­see the next phase that in­volves creat­ing liq­uid­ity and low­er­ing the debt levels.

/ENOS TECHE

KQ act­ing chief fi­nance of­fi­cer Dick Muriuki with MD Mbuvi Ngunze dur­ing the brief­ing yes­ter­day

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