Kenya Airways cuts down losses, records first operating profit in years

Kenya Airways (KQ) has cut its net loss for the year ended December 31, 2023. The national carrier recorded the first operating profit in nearly seven years on the back of higher revenues after passenger traffic grew 35% year-on-year.

KQ, listed on the Nairobi Securities Exchange (NSE), reported a net loss of $171.9 million, down 47%—even though its revenues improved by 53% to $1.35 billion.

The loss-making airline flew 5 million passengers in 2023, about 36% of Ethiopian Airlines’ (ET) passenger traffic in the 2022/23 financial year. ET is the carrier’s main competitor in the region.

“In the near term, the focus is on completing the capital restructuring plan whose main objectives are to reduce the Group’s financial leverage, fund growth, and increase liquidity to ensure the company can operate at optimal levels,” Allan Kilavuka, KQ Group CEO told investors on Tuesday during the release of 2023 financial results in Nairobi.

KQ, which has been in the red since 2012, promised investors that they are looking to return to profitability for the first time in more than a decade this year.

Accumulated losses over the years have seen Kenya’s flagship carrier dip into negative equity, making it technically insolvent with the government pumping billions in bailout.

Last year, the company tapped US advisory firm Seabury Consulting to help it restructure the business and develop a revival plan to wean it off state bailouts that have cost Kenyan taxpayers billions.

The carrier is currently in the process of hiring another consultant to help find an equity investor amid a new push to revive the business.

“Our focus is on completing the capital restructuring plan to reduce the Group’s financial leverage and increase liquidity to ensure the company can operate at optimal levels.

The aim is to place Kenya Airways on a stronger footing and provide a stable base for long-term growth,” Group CFO Hellen Mathuka said during the release of the results.