Kenya Airways to include Rome, Juba in new routes

By Duncan Miriri

Kenya Airways has said it will expand services as the emerging global recovery is likely to boost revenue this year.

The announcement comes after a gain on fuel derivatives pushed the airline back into the black in the first quarter.

It further expects the economic recovery seen in other parts of the world to flow into Africa and Kenya would benefit this year.

Chief Executive Titus Naikuni said Kenya Airways would start services to nine destinations including Rome and Juba in Southern Sudan.

The airline is also considering increasing the flight frequency on some routes like Kigali and positioning Accra as a west African hub.

"We still believe that Africa is where our mainstay is. It is where potential is," Naikuni said.

Kenya Airways’ revenue in the 2009-2010 year dropped slightly due to a 11 per cent decline in income from its cargo business but turned to a pretax profit from a loss a year ago due to a Sh6 billion ($74.72 million) boost from its fuel hedges, which it uses to balance future costs, after a Sh7.5 billion loss the previous year.

It also benefited from a weaker shilling against the dollar. The airline’s shares were down 4.4 per cent at Sh54.50 yesterday.

"The results whilst commendable did not hit investors’ admittedly elevated baseline expectations, and hence the profit taking bias this Morning," said independent analyst Aly Khan Satchu.

CEO Naikuni confirmed the airline was in discussions with Airbus about purchasing A330s after further delays in Boeing’s much anticipated B787 Dreamliner jets.

Fleet modernisation

Kenya Airways had ordered nine Dreamliners with an option for a further four, but they are not due for delivery until May 2013, which has prompted it to talk to Airbus about the A330 aircraft, Naikuni said. "We should be able to make up our mind (about whether to buy A330s) by the end of this calendar year," he said.

He also said Kenyan horticulture producers, whose exports to Europe account for a significant portion of the airline’s freight business, should consider exporting to other African markets.

Exports were hit when much of European airspace was closed due to an ash cloud from a volcano in Iceland.

The airline has had good growth since the first half of 2000 on the back of new routes to underserved African markets from its Nairobi hub and it plans to expand even more. —Reuters