* Swings to H1 profit from year-ago massive loss
* Expects delivery of 4 Dreamliner planes in 2014
* Extends CEO's contract by a year to end-2014
(Recasts with outlook)
By Duncan Miriri
NAIROBI, Nov 13 Kenya Airways expects
to post higher profits next year, thanks to the planned delivery
of fuel-efficient planes and the expansion of its Nairobi hub,
it said on Wednesday.
The carrier, which is 26.73 percent owned by Air France-KLM
and 29.8 percent by the government, is ranked among
the largest carriers in sub-Saharan Africa.
It swung into a pretax profit of 548 million shillings
($6.39 million) in its first half ended September, from a loss
of 6.589 billion shillings in the same period last year.
"Next time we are standing here we will post excellent
results," Chief Executive Titus Naikuni told an investor
The airline, which took delivery of its first Boeing
777-300ER this month, expects two more of the same planes in
2014. It also expects Seattle-based Boeing to deliver its
first four Boeing 787 Dreamliner planes starting in March.
The new Dreamliners will replace Kenya Airways' ageing fleet
of B-767s for long-haul routes, offering 20 percent more fuel
"You will have more fuel efficiency and a better product so
its a double-edged sword," Finance Director Alex Mbugua told
Reuters after the briefing.
Naikuni said another bottleneck they faced would be removed
in March when the government completes building a fourth
terminal at the Nairobi airport.
The carrier has been blaming lack of capacity at the airport
for delays in expanding its operations.
Built in the 1970s to handle 2.5 million passengers a year,
the airport has been struggling to cope with more than six
million passengers every year, as its regional importance grew.
Shares surged as much as 9.3 percent after the results were
unveiled to a near one and a half year high of 14.70 shillings
per share before paring the gains to 13.80 shillings.
"We have turned the corner," Naikuni said, adding that the
peaceful passage of Kenya's presidential election in March had
also boosted the travel business.
Total revenue jumped 9 percent to 54.34 billion shillings,
buoyed by a 7.1 percent jump in revenue from the passenger
business. Cost per seat fell while the revenue per seat went up
during the period, the airline said.
It also benefited from a realised gain of 216 million
shillings from its fuel hedging positions.
Board Chairman Evanson Mwaniki said they had extended
Naikuni's contract by a year till the end of 2014, to ensure
continuity during the critical expansion period.
The search for his successor had already started, Mwaniki
added. ($1 = 85.7000 Kenyan shillings)
(Editing by George Obulutsa, Ron Askew)