Kenya Airways (KQ) has cut its losses by 31.5% in the half-year financial results with the airline posting a record cargo performance.
In the financial results for the six-month period ending June 2022, the airline reported a half-year revenue of Kshs 48.104 million, a 76% increase when compared to the same period in 2021. KQ attributed the performance to the “significant” increase in its passenger (109%) and cargo (18%) revenue streams.
However, the airline also highlighted challenges caused by the lag in international air travel recovery in Africa, which is described as “somewhat weaker in the near-term, due to slow progress in vaccinating the population, and the impact of the crisis on developing economies”. The airline also noted that the results were further affected by the high price of aviation fuel.
According to KQ’s Chairman, Michael Joseph the airline recorded an operating loss of Kshs 5.009 million in the first six months of 2022, a 31.5% reduction when compared to the Kshs 7.274 million operating loss recorded in 2021.
“The results were further affected by the high price of aviation fuel which is over 65% more than the same period last year,” Joseph said in the airline’s report.
However, Joseph also teased profitability when discussing the airline’s latest financial results. “If we adjusted for the fuel price spike the operating profit for the period would have been Kshs 1.5B,” he said.
This is positive news for the airline, which, according to financial research firm Mwango Capital, last turned a profit in 2012.
Kenya Airways over the years: pic.twitter.com/9XRoZVggeU— Mwango Capital (@MwangoCapital) March 30, 2022
Kenya Airways Group CEO Allan Kilavuka is “confident” that the airline’s restructuring and cost reduction measures will return it to growth and profitability in 2024.
“We believe if we reduce costs on a permanent basis, the airline will turn around by 2024. In other words, we will be profitable by 2024,” said Kilavuka in an interview with FlightGlobal.
“We are very confident. We have a good model, a good product, a good brand. We just need to make sure we have lower unit costs for operations,” Kilavuka added.
Kilavuka also highlighted that, despite economic challenges, cargo volumes are expected to continue growing in 2022.
Kenya Airway’s cargo tonnage increased by 39% compared to the same period in 2021, the report noted.
Kenya Airways also revealed record cargo volumes in its HY 2022 presentation, carrying 34,873 tons, a 10% increase against 31,819 tons carried in 2019.