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Kenya Airways' Half-Year Profit Up 67%

posted Nov 7, 2010, 11:44 PM by Elaine Bell

By Cathy Buyck | November 8, 2010  

Kenya Airways 737. Photo: By Rob Finlayson.
Kenya Airways reported a net profit of KES1.44 billion ($172 million) for its fiscal first half ended Sept. 30, a 67% increase from the KES860 million it earned in the year-ago period. Revenue soared 23.1% to KES41.2 billion. Operating profit heightened from KES162 million to KES2.83 billion. EBIT margin was 5.8% compared to 0.5% in 2009.

“Kenya Airways, riding on a strong industry up-cycle, achieved positive growth during this period and successfully launched new destinations including Muscat, Juba and Luanda,” MD Titus Naikuni told investors.

Six-month operating costs rose 19.3% to KES25.9 billion mainly owing to a 29.1% hike in fuel costs and a 20.9% increase in staff costs. The carrier, which in recent months avoided a new strike by its staff, said employee costs as a percentage of total costs has grown from 9.6% in 2006 to 14.4% this year, and doubled to KES10.2 billion in real value in the five-year period. “In order to secure profitability in the future, employee cost in the future will need to be carefully managed in order to slow down this trend,” it warned.

RPKs rose 9.3% year-over-year to 4.36 billion on a 3% increase in capacity to 6.2 million ASKs, producing a load factor gain of 4.1 points to 70.2%. Passengers carried grew 6.7% to 1.52 million. CASK (in US dollars) rose 16.2% to 5.32 cents and RASK lifted 71% to 7.49 cents. Yield per RPK improved 25.1 % to 9.75 cents.

The Nairobi-based airline added three destinations in the reporting period and had 29 aircraft in operation as of Sept. 30, four more than a year earlier.

Naikuni said KQ has not yet decided whether to purchase A330s as a substitute for delayed 787s it has on order (ATW Daily News, Aug. 27).

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