Kenya Airways announced Tuesday it recorded an operating profit of KES 998 million for the first half of 2023, marking the first time the airline has been profitable in six years.
The national carrier has been working to turn around its fortunes after years of losses exacerbated by the COVID-19 pandemic. CEO Allan Kilavuka said the results “confirm the operational viability of the airline” and its turnaround strategy “is bearing fruit.”
Revenue grew 56% compared to the same period last year to reach KES 75 billion. Passenger numbers also rose 43% to 2.3 million.
The improved revenue and passenger growth comes as Kenya Airways increased flight capacity by 56% amid recovering demand, Kilavuka said. The airline’s on-time performance also increased from 58% to 77% this year.
“We have enhanced our customer experience at different touchpoints, the reliability and availability of our aircraft have significantly improved,” Kilavuka said.
Still in the red
However, the airline reported a KES 21.7 billion loss before tax, hurt by KES 17 billion in foreign exchange losses. Kilavuka blamed currency devaluation and the airline’s “legacy debt.”
The Kenya shilling has fallen 14% against the dollar this year. Since most of Kenya Airways’ transactions are in foreign currencies, the devaluation has increased costs and worsened its debt burden.
“We are working to resolve the issue of the legacy debt in collaboration with our stakeholders and the Kenyan government,” Kilavuka said.
The results provide a glimmer of hope for the airline after it lost KES 36 billion in 2021, prompting the government to pump in KES 20 billion to keep it afloat.
Michael Joseph, chairman of the airline’s board, said the first half results “offer encouraging indications” that the turnaround efforts “are bearing fruit.”
Industry group IATA also found air travel demand seems to be recovering globally based on its May passenger survey data.
Kilavuka said Kenya Airways will focus on “recapitalizing the business” and network expansion to aid its turnaround.
“It all starts with a robust summer peak, particularly in July and August, where our load factors exceed last year’s,” he said.
Kenya Airways, also known as KQ, is one of the largest airlines in Africa. It flies to over 50 destinations around the world.