@obiero - I need to look at the 1H 2012-13 results but I am worried about KQ's 2H 2012-13 as well. I think the worst (hit) of the hedges were taken in 1H but 2H has operational challenges thus the (overall) loss may not as large as 1H but an operational loss for 2H.
My non-Exchange Bar thoughts!
1) The huge salary savings that were not saved from the 800 staff who the (useless) court sent back to work. Upon their 'return to work', they probably did not care about working as much as gloating.
2) The costs of the 'firings' that have to be expensed. Lawyers, HR, etc.
3) The slowdown in 4Q 2012-13 (Jan-Mar 2013) due to the elections. Look at the 4Q passenger numbers.
4) The increased fixed assets (planes) in 2H 2012-13 which may not have been fully utilized with the low PLFs.
5) Aggressive RwandaAir & Air Uganda which competes for the lucrative KGL & EBB routes.
Pros
1) The LCCs seem to be dead/dying. Fly 540 has issues with FastJet. Jetlink has issues in South Sudan which crippled it.
2) The drop in the (share) price to reflect the problems.
3) Stable KES & fuel prices.
From the 4Q 2012-13 Operational Update
http://kenya-airways.com..._JAN_to_MAR_2013/?dis=y
"The company put into the market capacity totalling 3,143m seat kilometres which was 4.5% below last year’s level."
Despite having more aircraft i.e. seats available if the planes were not sitting at JKIA."Europe shrunk in capacity by 30.4% compared to the same quarter prior year due to rationalization occasioned by the Euro zone crisis and anticipated lower demand during the Kenyan election period."
"West African region declined by 6.5% mainly on the Lagos route as a result of operating the smaller B738 aircraft compared to B767."
"Traffic measured in revenue passenger kilometres at 2,073m was 7.5% below similar period last year."
This is critical. Fewer bums in the seats = lower revenues = lower profits."...economic challenges facing the Euro-Zone... cutbacks in capacity... closure of the Rome route... passenger tally at 828,032 was at par with last year... cabin factor at 65.9% was 2.2 points lower..."
What is KQ's Break-Even Load Factor?"Cargo capacity dropped by 14.9% with a proportionate decline in tonnage during the period. There was a general slump from some key feeder markets in Asia and Europe."
Ouch! Hurt from BOTH Asia & Europe!Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett