Kenya Airways (KQ) recently held an investors briefing at the Crowne Plaza in Nairobi, where it announced financial results for the nine month period ended 31 December 2017.
“2017 started on a good note but was later affected by the political climate in the country from August into the end of the year. However, we recorded improvements in our numbers,” said KQ chairman, Michael Joseph.
According to the report, Kenya Airways passenger numbers hit 3.4 million, Revenue Passenger Kilometre (RPK) stood at 8.1 M-this is a metric for measuring the demand for an airline showing the number of kilometres traveled by paying customers -as KQ expanded its network of destinations to include Victoria falls in Zimbabwe.
The Airline also outlined its list of accomplishments for the year, including winning the 2017 Best Business Class in Africa, African Airline of the year at the World Travel Awards (WTA).
The global outlook for Kenya Airways is positive as the airline industry is growing, for instance, the 2017 expenditure on air travel accounted for 1 percent of the $75 trillion global GDP, with the number of paying customers per kilometer increasing by 7.9 percent internationally and 7.5 percent in Africa relative to 2016.
Kenya Airways has attributed its 20 percent drop in traffic to political instability and increased fuel price volatility (fuel went up by slightly over tenth in 2017), with the report pointing to the sh 700 billion in losses businesses had incurred from political activities in 2017- a figure released by the Kenya Private Sector Alliance from its members.
In the report, KQ also revealed its new shareholding structure that came into play after its debt to equity arrangement. Whereby, the government (previously owning about a third of KQ), and KQ Lenders 2017 Ltd-including banks such KCB Group, Co-operative Bank and Equity, converted their debt with KQ into shares.
Under the new structure the government owns 48 percent of KQ shares, KQ Lenders Ltd owns 38 percent and Dutch airline-KLM (formerly the second majority shareholder) 7.8 percent.
The Kenya Airways financial results indicated total overhead costs of sh 15.5 billion, an operating profit of sh 1.3 billion (representing a sh 400 million increase) and a sh 6.1 billion after tax loss- this a 4 million reduction of the sh 10.2 billion loss posted for the 12 months ended March 2017.
Kenya Airways had quite an eventful year in 2017 and going forward into 2018 the airline is hoping to capitalize on increased expansion into other African countries-direct flights to Mauritius in addition to the long awaited direct flights to New York due in October.