KQ braces for Europe flight disruptions

“The 62.58 per cent growth potential in earnings over the next two years would be achieved through consolidation of gains expected from the recent routes expansion,” says a research note by Sterling Investment Bank.

The national carrier is expected to add 10 new routes in Africa over the next three years.

So far analysts expect that half year results and the upturn of the global economy will play to the airline’s advantage. An airline’s profitability generally grows or falls in tandem with the global economy, said Mr Bodo.

Regions where the national operator has presence are on an economic recovery path and it is expected that revenues from these regions should grow the firm’s bottom line.

Profit after tax for the half year ended 30 September 2010 was Sh1.436 billion, a 66.9 per cent increase from Sh860 million posted over a similar period in 2009 driven by the global upturn in traffic.

In the last quarter ended March 31 2011, a key performance measure such as passenger traffic grew to 829,263, a 7.3 per cent growth over a similar period in 2010.

Since December, however, the last quarter for the airline’s financial calendar, fuel prices have risen, fanned by political unrest that rocked North Africa and the Middle East.

The shilling has also weakened to historic levels; all factors having an impact on the bottom line.

jgachiri@ke.nationmedia.com