The successful addition of three new destinations – Jeddah, N’Djamena and Ouagadougou in Africa contributed to the profitability.
Half year turnover reached KShs54.9bn (Dhs2.23bn) is a 33.3% increase on the previous year figure of KShs41.2bn (Dhs1.67bn). This resulted in KShs2.034bn (Dhs82m) profit after tax compared to prior year profit of KShs1.436bn (Dhs58m). This resulted in a net profit margin of 3.7% which is an improvement from the 3.5% achieved during the previous period. Earnings per share increased to KShs4.40 from KShs3.11 realised in the prior year.
Management continued to invest time and resources towards maintaining high levels of safety in all its operations during the period.
High Passenger traffic growth was achieved in all regions over the period as follows: Middle East passenger numbers grew by 24% and European traffic was up 13.3% due to improved demand out of London, Paris and Rome that was launched in late 2010 thus, was not part of first half of prior year.
Africa grew by 15.7% largely due to launch of operations into Ouagadougou and N’Djamena during the period. There was also improved performance on routes launched last year to Southern Africa and increased frequencies to Juba. Far East traffic to Bangkok, Hong Kong and Guangzhou increased by 24.8% largely the result of increased capacity in the region.
“This is an exceptional performance,” said Mr Abraham Joseph, Area Manager – Gulf, Middle East & Pakistan, Kenya Airways “The response of our newly launched Jeddah route has been very positive which adds to our success. Our half year financial results are due to the hard-work and dedication of all our staff around the world. We have relentlessly pushed to reach new markets despite of the increasing competitive environment.”
The Board has taken cognisance of the cyclical traffic demand and has approved a ten year plan that will enable Kenya Airways remain competitive by positioning itself to capture the traffic flows in the future.
The ten year plan starts from this financial year to 2020/21. The plan includes new destinations roll out covering the six continents and a fleet acquisition plan. The immediate items in implementation of the plan starts with earnest within the next six months with a Rights Issue as already communicated to potential investors. The Rights Issue proceeds will form part of the initial fleet pre-delivery payments for the years 2013/14 and 2014/15 aircraft acquisitions.
According to IATA, the global aviation industry is weak but still profitable. IATA estimates the airline industry worldwide profits in 2011 at $6.9bn, but will slip down to $4.9bn in 2012. The economic growth in Europe and North America remain weak, Asia-Pacific remain strong but with a damper on Japan.
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