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