Kenya Airways to unveil big capital restructuring

Kenya Airways expects to unveil a big capital restructuring in the next two months as part of its turnround strategy after returning to operational profitability following four years of losses. Mbuvi Ngunze, who steps down as CE next week, said the airline, which slashed its loss before tax by 61% in the year to March 2017, “is not out of the woods yet”. But unveiling the full-year figures he insisted: “The turnround is happening and the results are reflected in these [financial] results.” Operational profit was Ks897m (US$8.7m), up from a loss of Ks4.1b the previous year. If one-off impairments are removed, the operating profit was Ks4.4b. Losses before tax declined to Ks10.2b from Ks26.1b in the previous year. Kenya Airways began a big expansion in 2012, but hit turbulence the following year after the terrorist attack on Nairobi’s Westgate shopping mall and the Ebola outbreak in west Africa. It was also hit hard by the slump in oil prices, having hedged most of its fuel purchases when prices were about $90 per barrel. Ngunze said the financial improvement was driven by passenger numbers increasing to a record 4.5m during the year and the cabin load factor, which measures average occupancy, rising from 68 to 72%. The airline is benefiting from a rebound in tourist arrivals to its home market and Kenya’s economy performing better than most of its regional peers. <br/>