Kenya Airways recovery on course are losses reduce

Kenya Airways has reported a reduction in pretax losses and a return to profit at the operating after carrying a record number
of passengers in the past year, and said it expected a financial restructuring would be completed shortly.

The carrier had struggled to return to profit after tourist traffic slumped 4 years ago following a spate of attacks by Somalia-based Islamist militants.
But losses before tax were down by 60.9 percent at Ksh10.2 billion shillings (US$98.8 million) in the year ended March 31 and
the company reported an operating profit of Ksh897 million (US$8.69 million) which compared with a loss of Ksh4 billion (US$38.7 million) in the previous year.

Mbuvi Ngunze, the outgoing chief executive officer, said the improvements put it in a good position to boost its capital and
restructure debt.
“There were doubting Thomases out there who said Kenya Airways is dead and buried,” Ngunze told reporters. “But we said we are
resilient.”

Passenger numbers were up by 5.4 percent last year at a record high of 4.5 million, with the average percentage of seats
sold up 4 percentage points at 72.3 percent of capacity, boosted by a 13 percent jump in traffic on African routes.
The improvements came as the airline cut its fleet by 8 widebody Boeing aircraft in the last 18 months to combat overcapacity and costs.

“We have gone back to basics. We have had to unlearn, learn and re-learn how to do business in a changing competitive
context,” said Ngunze, who became CEO in 2014. He said the airline’s main risk now was currency depreciation in countries like Angola, Egypt, Mozambique, Nigeria, Sudan, and South Sudan, making it hard to price services and repatriate cash.

Global carriers had US$400 million stuck in Nigeria at the height of its foreign exchange crisis last year but this year the government had worked with the industry to introduce solutions like forward purchase options, he said.

Ngunze is stepping down as CEO next month.
In reference to his turbulent time at the helm of the airline, Ngunze quoted Theodore Roosevelt at the end of his
presentation of the full year results to investors.
“It is not the critic who counts; not the man who points out how the strong man stumbles,” he said. “The credit belongs to
the man who is actually in the arena, whose face is marred by dust and sweat and blood.”

Source: Reuters