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Kenya Airways profit down, but moving ahead with plan to serve six new Chinese destinations

Analysis

Kenya Airways remained profitable for the six months ended Sep-2011, despite high oil prices and the European economic climate, due to strong passenger demand and its continuing route expansion. The East African carrier plans to continue with its aggressive expansion plans, aiming to begin additional services to major trading partners China and India in the near future. Kenya Airways' board of directors approved the carrier's planned rights issue in the period, which will fund the planned route and fleet expansion. The board also approved the doubling of the carrier's share capital to KES300 billion (USD3.0 billion) ahead of the cash call.

Kenya Airways has remained tight-lipped about its LCC subsidiary Jambo Jet's progress, only revealing it will operate all, and possibly more, of its parent's East African routes. If this is the case, Kenya and East Africa's domestic and regional capacity share will be given a major shake-up as a LCC will become one of the region's largest carriers.

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