Kenya Airways CEO Allan Kilavuka painted an optimistic picture of the airline’s future while appearing before the National Assembly’s transport committee on Tuesday, forecasting a return to profitability by 2024.
Kilavuka guaranteed legislators the airline would be profitable based on current financial projections during his testimony before the committee, which is chaired by Ndia MP George Kariuki.
“We are confident that Kenya Airways will return to net profitability in the financial year 2024,” Kilavuka told lawmakers.
He said Kenya Airways’ expected growth was fueled by a 56% increase in group revenue, reaching KES 75 billion in 2022. Passenger numbers surged to 2.3 million, a 43% jump from 1.6 million the previous year. This signified a 131% gross profit improvement.
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However, Kilavuka cautioned that the airline still faced daunting challenges, including KES 86 billion in debt incurred during years of losses. Kenya Airways is also grappling with capacity dumping from larger Middle Eastern and European airlines like Emirates and KLM which can offer lower fares on routes to and from Nairobi, resulting in unfair competition, according to Kilavuka.
Legislators pressed Kilavuka for assurances about the airline’s continued performance improvement after years of losses. They also questioned why the company had experienced significant financial shortcomings in 2019 and 2020 despite receiving government bailouts and loan guarantees.
In response, Kilavuka touted the airline’s new cost-cutting measures and route network expansions to underserved markets like central Africa. He said these strategies would help Kenya Airways reduce its reliance on competitive Europe routes.
Committee chairman Kariuki said lawmakers are prepared to assist with policy changes to address issues faced by the national carrier.
“We as a committee are keen on seeing that Kenya Airways as a national carrier continues undergoing consistent improvement. We will step in should the need arise for policy enactment,” Kariuki told airline executives.
