Bloomberg News

Kenya Airways Profit Surges 74% on New Routes, Boosted Fleet

June 02, 2011

(Updates with closing share price in eighth paragraph.)

June 2 (Bloomberg) -- Kenya Airways Ltd., sub-Saharan Africa’s third-biggest airline, said full-year profit surged 74 percent as it added routes and boosted its fleet.

Net income increased to 3.54 billion shillings ($41 million) in the 12 months through March from 2.04 billion shillings a year earlier, Finance Director Alex Mbugua told reporters in Nairobi. Sales rose 21 percent to 85.8 billion shillings. The airline added four aircraft to its fleet, taking the total to 31 in the year and expanding seat capacity by 5.6 percent to 4,929.

“Kenya Airways will fly eight new routes this year,” Managing Director Titus Naikuni said in Nairobi today.

The Nairobi-based carrier plans to double the size of its fleet to 60 planes in the next four years, and will begin flights to new destinations including the capitals of Nigeria, Chad, Togo and Burkina Faso, as well as Mauritius and the Saudi Arabian city of Jeddah, in 2011, Naikuni said April 28.

South African Airways and Ethiopian Airlines Enterprise are sub-Saharan Africa’s two biggest carriers, according to IATA, which represents over 230 airlines making up about 93 percent of scheduled international air traffic.

“The performance is within our expectations,” Gregory Waweru, an analyst at Nairobi-based Kestrel Capital East Africa Ltd., said in an interview today. “Revenue per seat per kilometer kept pace with growth in capacity.”

Fuel costs increased 33 percent to 24 billion shillings, or 46 percent of expenses, from 43 percent of costs a year earlier, Waweru said.

The shares of KQ, as the airline is known, jumped to the highest level since Feb. 11, adding 4.3 percent to 42.50 shillings by the 3 p.m. close in Nairobi.

The company recommended a dividend of 1.5 shillings a share, 50 percent more than a year earlier.

--Editors: Ana Monteiro, Alastair Reed

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net


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