In a triumphant comeback, Kenya Airways has shattered expectations, announcing its first operating profit in seven years, a staggering KSh 10.5 billion for the fiscal year ending December 31, 2023. This remarkable achievement marks a monumental 287% increase from the previous year’s operating loss of KSh 5.6 billion, boasting a margin of 5.9%.
Despite these impressive gains, total operating costs escalated by 30%, climbing from KSh 155 billion in 2022 to KSh 201 billion in 2023. Notably, a substantial portion of this increase, KSh 33.56 billion, was attributed to financing costs. The surge in financing expenses was primarily fueled by a hefty KSh 24 billion FX loss on the repayment of dollar-denominated loans, alongside other foreign-related obligations such as lease costs and monetary assets.
Kenya Airways’ Managing Director and CEO, Allan Kilavuka, expressed optimism during an investor briefing on March 26, 2024, stating, “This profit is an indication that we are well on our path to recovery.” Kilavuka underscored the commitment to turn around fully, despite lingering bottom-line losses primarily due to the FX situation. With improving FX conditions, Kilavuka is hopeful for a favorable outlook in the coming year.
The airline’s gross profit soared from KSh 19.4 billion in 2022 to a robust KSh 41 billion in 2023, marking a remarkable 112% margin fueled by revenue growth outpacing costs. Moreover, cash generated from operations witnessed substantial growth, surging from KSh 10.3 billion in 2022 to an impressive KSh 25.3 billion in 2023, demonstrating the business’s resilience and viability.
Looking ahead, Kenya Airways is poised for expansion, having bolstered its cargo capacity with two new Boeing 737-800 freighters. Additionally, plans are underway to lease two additional Boeing 737-800 new generation passenger aircraft by Q3, augmenting the existing fleet of eight. The subsidiary, Jambojet, has also expanded, with one aircraft added last year and another planned for this year.
With an unwavering focus on business capitalization, Kenya Airways is actively seeking suitable partners to support expansion efforts. Kilavuka expressed confidence in securing partnerships that will propel the airline’s growth trajectory, signaling potential good news by year-end.
Remarkably, Kenya Airways accomplished these milestones without financial injections or disbursements from the National Treasury in 2023, showcasing their commitment to self-reliance amidst ongoing debt restructuring support.
