National Carrier Kenya Airways is looking to return to profitability in 2024 in order to attract a strategic investor.
The airline says it has earmarked 2024 as the year that it will break even and record a marginal profit, if the current performance maintains the same trajectory.
The government had set June as the period that the national carrier was expected to get an investor to pump cash into the loss-making airline, to wean it off frequent cash support.
Kenya Airways CEO Allan Kilavuka who was speaking during the airline's 48th Annual General Meeting, maintained that throughout the fiscal year 2023, KQs capacity experienced a remarkable growth of 44 per cent compared to the previous year, a clear indication of the company’s growth trajectory.
“We had planned to break even by 2024 but now we have revised that to break even plus make a profit. We expect to make a nominal profit this year, from increased passenger numbers and cargo capacity,” said Kilavuka.
The airline, which is 48.9 per cent, state-owned, didn’t receive a direct disbursement from the National Treasury last year and instead got support in restructuring some debts.
The CEO maintained Kenya Airways' commitment to its turnaround strategy, dubbed Project Kifaru, with a primary focus on completing the capital-restructuring plan.
The objectives of this plan include reducing the company’s financial leverage and enhancing liquidity to ensure normalised operations.
“Through the retirement of legacy debts, strengthening of financial foundations, and pursuit of operational excellence, recapitalisation will position Kenya Airways to thrive in a competitive and dynamic aviation landscape," said Kilavuka.
In the plan, KQ is looking to drive revenue growth by expanding operations, passenger charters, and partnerships.
The airline has been struggling financially even as it narrowed losses to Sh22.6 billion in the year ended December, down from Sh38.2 billion a year earlier.
At the center of KQ’s poor financial health have been huge costs that water down the billions of shillings the airline makes in revenues, mainly fuel costs, costs to repay loans and fleet maintenance.
“Of course, we have to improve our balance sheet. We are looking to create a strong balance sheet to attract a strategic investor,” chairman Michael Joseph said.
The ongoing recovery and strategic turnaround initiatives, he said, have resulted in KQ achieving an operating profit of Sh10.5 billion.
"This milestone is particularly significant as it marks the first time in over seven years that the airline has attained such a level of financial success, signaling a positive trajectory for KQ's future,” he said.
