- Kenya Airways (KQ) has warned of a 25 percent decline for the financial year ending 31 March 2009 in its profits blaming it on the current global economic crisis. However it said the airways is expected to remain profitable although it is to yield 25 percent less than last year.
The airways has also blamed poor performance on the 2007 and early 2008 post-election violence and high fuel prices that hit a record high of US $147 a barrel last July, sparking riots in many African states including Kenya.
According to a communiqué issued by the KQ Chairman Evanson Mwaniki today, he said KQ had hedged part of its fuel consumption at prices higher than the market, and this coupled with the weakening of the Kenyan shilling against the US dollar would impact negatively on their profitability.
Mr Mwaniki also blamed the volatility of the local currency for the reduced profit margins saying that a strong shilling early last year magnified the decline in profitability of the airline, while a weak currency in the recent past has seen the company pay higher prices for fuel.
"The Board of Directors, at this time, expect Kenya Airways to remain profitable but the profits would be less than the previous year," said Mr Mwaniki in a statement. The anticipated decline in profitability is part of the global financial crisis that saw the aviation industry register a decrease in passenger numbers.
News reports said the International Air Transport Association has predicted that globally, airlines are likely to make a combined loss of US $5 billion in the 2008/2009 financial year and a three percent passenger traffic decline in 2009/2010.
Meanwhile, Kenya Airways intends to start flying to Luanda as early as possible with a view to strengthening the bilateral relations between the two countries, Angola's official news agency ANGOP reported on Saturday.
Kenyan Foreign Minister Moses Wetangula was quoted as saying that Luanda is the only key capital city of an African country to which Kenya Airways does not fly to, although there is a big potential market in terms of financial incomes the route presents.
He also said there are lots of Kenyan people who work and live in Luanda and are asking for opening the route. According to the Kenyan foreign minister, the Kenyan government is also willing to discuss with the Angolan government the possibility of opening diplomatic representations in each other's country with a view to boosting bilateral cooperation in various sectors.
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