Kenya Airways expected to post higher profits next year, thanks to the planned delivery of fuel-efficient planes and the expansion of its Nairobi hub, the carrier said yesterday.
The company, which is 26.73 percent owned by Air France-KLM and 29.8 percent by the Kenyan government, is ranked among the largest carriers in sub-Saharan Africa.
It swung into a pretax profit of 548 million shillings (R65m) in the first half to September, from a loss of 6.589 billion shillings in the same period last year.
“Next time we are standing here we will post excellent results,” chief executive Titus Naikuni told an investor briefing yesterday.
The airline, which took delivery of its first Boeing 777-300ER this month, expects two more of the same model in 2014. It also expects Boeing to deliver the airline’s first four Boeing 787 Dreamliner planes, starting in March next year.
The Dreamliners will replace the ageing fleet of 767s for long-haul routes, offering 20 percent more fuel efficiency.
“You will have more fuel efficiency and a better product so it’s a double-edged sword,” finance director Alex Mbugua said after the briefing.
Naikuni said another bottleneck the airline faced would be removed next March when the government finished building a fourth terminal at Nairobi’s airport. The carrier has blamed lack of capacity at its hub airport for delays in expanding its operations.
Built in the 1970s to handle 2.5 million passengers a year, the airport has been struggling to cope with more than 6 million passengers as its regional importance has grown.
After the results were unveiled Kenya Airways shares surged as much as 9.3 percent to almost a one-and-a-half-year high of 14.70 shillings before paring gains to 13.80 shillings.
“We have turned the corner,” Naikuni said, adding that the peaceful passage of Kenya’s presidential election in March had also boosted the travel business.
Total revenue jumped 9 percent to 54.34 billion shillings, buoyed by a 7.1 percent jump in revenue from the passenger business. The cost per seat fell while revenue per seat went up during the period.
The airline also benefited from a realised gain of 216 million shillings from its fuel hedging positions.
Board chairman Evanson Mwaniki said Naikuni’s contract had been extended by a year until the end of 2014, to ensure continuity.