Kenya Airways returns to profitability after 10 years

Kenya Airways, the flag carrier airline of Kenya, has finally turned a profit after nearly a decade of losses, marking a significant milestone in the company's tumultuous journey. The airline reported its first positive earnings since 2013, a feat that speaks volumes about the strategic changes and financial restructuring implemented under the leadership of CEO Allan Kilavuka. In a recent interview with CNBC Africa, Kilavuka shed light on the transformational initiatives that have steered Kenya Airways back on course towards profitability. One of the key factors contributing to Kenya Airways' shift to positive financial territory was the strategic management of debts. Kilavuka highlighted the restructuring of debts from US dollar denomination to Kenyan shilling denomination, a move aimed at curbing significant forex exchange losses. Additionally, the introduction of 'Project Kifaru 2.0' signaled the airline's focus on injecting capital and seeking a new strategic investor to enhance operational stability and pave the way for sustainable growth. Despite the positive financial outlook, challenges remain for Kenya Airways, particularly in managing operating costs while expanding capacity and delivering exceptional service quality. Kilavuka acknowledged a 22% increase in operating costs in conjunction with the record high total income of 91 billion Kenyan Shillings, emphasizing the need to ensure that operating costs do not outpace revenue growth. The CEO emphasized the importance of maintaining cost discipline amidst an ever-changing market landscape. The financial performance of Kenya Airways has also been impacted by external factors such as currency fluctuations. Kilavuka explained how the airline navigated unrealized forex losses and gains by transitioning long-term obligations from U.S. dollar to Kenyan shilling denomination. This strategic move, coupled with the significant gains of the Kenyan shilling, has positioned the company to withstand currency volatility and enhance financial resilience. Looking ahead, Kilavuka expressed confidence in Kenya Airways' ability to thrive in a volatile market environment, citing the airline's global presence across 48 destinations worldwide. While acknowledging the challenges posed by external forces like political instability and fluctuating passenger traffic, Kilavuka emphasized the company's commitment to working closely with governments to mitigate risks and sustain operational efficiency. In conclusion, Kenya Airways' return to profitability after years of losses underscores the perseverance and strategic acumen of Allan Kilavuka and his team. The airline's focus on financial restructuring, cost discipline, and operational efficiency has laid a solid foundation for sustainable growth and continued success in the competitive aviation industry.