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KQ warns of 25pc drop in earnings

NAIROBI, Kenya, Jan 27 – National carrier Kenya Airways (KQ) expects a 25 percent drop in earnings this financial year, despite a Sh2.8 billion profit before tax in half year ended Sept 30, 2011.

The airline experienced a reduction in revenues in the second half of the previous financial year citing the eurozone crisis, escalating fuel prices, and the political unrest in Egypt and Nigeria as major contributing factors.

“These factors are negatively impacting the second half of Kenya Airways operating results for the financial year 2011/2012,” Kenya Airways chairman Evanson Mwaniki said in a statement. 

Mwaniki added that KQ’s continuous growth plans in Asia and Africa supported the airline’s Sh2.8 billion profit.

In the Middle East, Far East and India regions the airline registered passenger traffic at 131,126 showing an increase of 6.8 percent in the third quarter of 2011, according to its recently released operating results. 

KQ is awaiting the delivery of nine Dreamliner 787-8 aircraft in the fourth quarter of 2013 that will see the airline expand its network in the Afro-Asian trade corridor.

With one destination in India (Mumbai) KQ plans to increase frequency to six new destinations in India and six new destinations in China, once the new aircraft arrive.

The Africa network is KQ’s biggest earner raking in about 60 per cent of the airline’s revenue. 

Excluding Kenya, Passenger numbers for the third quarter ended December 31, 2011 within Africa totalled 502,435 indicating a growth of 14.1 percent, compared to a 3.9 percent capacity growth.

KQ is planning a rights issue, which shareholders have already approved and is expecting to raise Sh22 billion to finance the acquisition of new aircraft to expand its fleet capacity.

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