KQ has recorded revenues of Ksh110 billion for the year ended 31 March 2015, an increase of four per cent on last year. However, gross profit fell to Ksh8.2bn, a decrease of Ksh10bn year on year (or Ksh3.6bn excluding one-off impacts).
The airline’s operating loss of Ksh16.3bn represented a decrease of Ksh13.6bn on the previous year. This includes impairment costs and spares provision of Ksh7bn relating to KQ’s four Boeing 777-200s, which are up for sale, and the accelerated depreciation for its out-of-service Boeing 767s. The total loss for the year was Ksh25.7bn.
During this period Kenya Airways successfully completed the first phase of its fleet renewal programme, which saw the acquisition of five B787 Dreamliners, two B777-300s and three B737-800NGs. At the same time its entire fleet of 767s were removed from service. These investments, however, coincided with a difficult business environment, driven by incidences of terrorism in the region, together with detrimental external factors such as the West African Ebola crisis. As a result, both the operational and financial performance of the airline were adversely impacted.
On a positive note, the number of passengers Kenya Airways carried during the period jumped by 500,000 to 4.2 million. Available Seat Kilometres rose 8.6 per cent to 15,406 million, with the uptake of capacity rising by 5.2 per cent. The capacity availed to Europe grew 13 per cent, due to the deployment of the larger B777-300ER on the Amsterdam route and the introduction of the Dreamliner on the Paris service. The Middle East and Far East saw a 9 per cent expansion in capacity. Within Africa the capacity offered rose 3.6% as a result of increased frequencies, despite the suspension of flights to West Africa and South Sudan. The domestic market saw a huge 29 per cent growth following the entry of KQ’s low-cost carrier JamboJet into the market.
Direct operating costs remained static at Ksh76.1bn despite the increase in capacity, mainly driven by savings in fuel cost.
Against this background, the Board has taken measures to safeguard the business. These include an agreement with Afrexim Bank to act as a financial advisor and to provide a US$200m bridging loan; and the acceleration of a revenue generation action plan.
The Board believes KQ’s product offering is greatly enhanced with its fleet renewal and the improvements at its Nairobi hub.
KQ appoints Chief Operating Officer
Kenya Airways has announced the appointment of Yves Guibert as Chief Operating Officer. The position fell vacant with the appointment of Mbuvi Ngunze as the Group Managing Director and CEO in November last year. Guibert, whose new appointment took effect on 1 August, has been serving in an acting capacity since December.
Ngunze said the appointment was in line with airline’s recovery strategy. “We are undertaking a comprehensive evaluation of our business strategy to align it with both the prevailing and emerging realities in the tough environment in which we are now operating. The appointment of Mr Guibert to oversee our operations is in tandem with this new strategic thrust,” he explained.
Guibert has served as KQ Ground Services Director since March 2009, and was instrumental in improving the efficiency and productivity of the airline’s operations.