Kenya Airways (KQ) registered higher turnovers despite increasing jet fuel prices that could put the aviation industry in jeopardy
International Air Transport Association (IATA) warned that high jet fuel prices may affect profits of airlines. Jet fuel prices stood at US$ 96 per barrel (Brent) in March 2011, up from US$84 forecasts in December 2010 may hurt the industry.
Dr. Titus Naikuni, the Executive Group Managing Director and Chief Executive Officer of Kenya Airways noted that despite these major challenges in the aviation industry KQ has continued to be profitable.
“Fuel already accounts for about a third of an airlines cost structure but we are aware that simply responding to challenges is not enough, we have to anticipate them,” he said during the airlines annual general meeting held in Nairobi late last week.
He added that the airlines achieving a record turnover of Kshs85.8b which represents a 21 per cent increase in 2010/2011 compared to Kshs70.7b turnover in 2009/2010.
He added that that profit after tax increased to Kshs3.5b from kshs2.035b last year representing a net profit margin of 4.1 per cent rise from 2.9 per cent in 2009/2010.
Naikuni also noted that airlines average passenger load factor for the year was 78.4 per cent which was a 2.7 percent point improvement in 2009. The freight load factor recorded a 5.2 percentage point improvement to 53.8 percent. The Board Chairman KQ, Evanson Mwaniki, said management’s continued investment of time and resources towards maintaining high levels of safety in all its operations during the period aided the airline to its historic mark of 3.136 million passengers in the year 2010/2011 up from 2.890 Million.
He attributed the growth to improved economic conditions and introduction of new destinations.
“Passenger traffic measured in terms of revenue passenger RPK grew by 9.3 percent over prior year due to an improved world economic climate during the first three quarters of the year”, the chairman said.
Nzau Jones, a shareholder and a businessman, welcomed the performance but noted that the airline needs to do much in increasing bonuses.
“We want in future the company to provide better courtesy to its investors,” he said, adding that shareholders need to witness an increase in share profits.