Kenya Airways bounces back with Sh5.4 billion profit after years of losses

Kenya Airways has reported a net profit of Sh5.4 billion for 2024, marking its first profit in 12 years.

The turnaround comes after the airline recorded a Sh22.6 billion loss in 2023, with the improvement largely driven by foreign exchange gains.

Kenya Airways Chief Executive Allan Kilavuka described the profit as a historic achievement for the national carrier.

“It is the highest profit this company has reported in its history,” he said.

The airline’s earnings before interest, tax, depreciation, and amortization stood at 20 percent in 2024, surpassing the industry average of 17 percent.

A key factor in the improved financial performance was foreign exchange gains of Sh10.55 billion, a sharp contrast to the Sh15.04 billion loss recorded in 2023.

The strengthening of the local currency by more than 20 percent against the US dollar played a major role in this recovery.

Kenya Airways also recorded an operational profit of Sh16.62 billion, up from Sh10.53 billion in 2023, supported by increased revenue and cost reductions.

Total revenue grew by six percent to Sh188.4 billion, compared to Sh178.4 billion the previous year.

Passenger numbers increased by four percent to 5.23 million from 5.04 million in 2023, while cargo volumes surged by 25 percent to 70,776 tonnes from 56,576 tonnes the previous year.

The airline expanded its operations by adding two cargo planes to its fleet and launching flights to new destinations, including Mogadishu in Somalia, Maputo in Mozambique, and Eldoret.

These efforts contributed to revenue growth and enhanced operational efficiency.

Despite the positive performance, Kenya Airways still faces financial challenges, particularly in terms of working capital.

The airline remains in a negative equity position due to losses accumulated over the past 11 years. To achieve long-term financial stability, it plans to secure a new equity investor in 2025 for a substantial capital injection.

However, progress in attracting a strategic investor has been slow, as the government, which is the airline’s principal shareholder, is still evaluating options to address the company’s financial challenges.

Kenya Airways Board Chairman, Michael Joseph, stressed the need for additional funding to ensure long-term growth.

“We look into the future with anticipation. We have made a profit, but what Kenya Airways really needs is a huge capital injection to improve, including flying to new destinations and making passenger experiences better,” he stated.

The airline acknowledged operational challenges, including below-par on-time performance and a higher-than-normal rate of flight cancellations in 2024.

Addressing these issues remains a priority as it seeks to sustain profitability and improve service delivery.