http://www.theeastafrican.co.ke/business/Precision-may-not-last-long-in-the-air/-/2560/2097086/-/pg3is2/-/index.html

Things are rough!

Auditors have raised fresh doubts over the future of Tanzania’s largest commercial airline, Precision Air, given its surging losses and liabilities while the government dithers on approving a bailout plan.

An audit report paints a gloomy picture of the loss-making firm, saying its liabilities had exceeded its assets by Tsh83.14 billion ($53 million).

It has also for several years not remitted its statutory deductions and indirect taxes to the government amounting to Tsh19 billion ($12 million) as of March 2013, says the report prepared by the airline’s auditors, Ernst & Young, and tabled at the annual general meeting on November 20.

If PW goes down then KQ will have to take the loss or writedown in 2H 2013-14

I don't get why they are citing fuel costs and currency cashflows as reasons. KQ actually reported gains from fuel derivatives which cover 80% of their costs. Fuel has been on the downturn. Its poor management and poor planning. They need to do total management restructuring.

I sold my shares at 13.95 made my shares 40% profit and waiting it to fall farther down i purchase again.

Lets focus on the good news.from the H1 investors briefing...........

Its worth contextualising these first half results against the backdrop of that reporting period, which period included the JKIA fire (that adversely affected transit passengers through Nairobi), the terror attack at Westgate amongst other headline events.


Kenya Airways took delivery of its first Boeing 777-300ER this month and expects two more of the same planes in 2014. It also expects Boeing to deliver its first four Boeing 787 Dreamliner planes starting in March.
The new Dreamliners will replace the airline's ageing fleet of B-767s for long-haul routes, offering 20 per cent more fuel efficiency.


The average price of jet fuel per gallon in US cents declined 10 per cent versus the previous year and I expect that trend to remain intact in second half as the US and Iran continue to deflate the geopolitical premium in the price of oil. Also consider that fuel Costs represented 37 per cent of total operating costs - See more at: http://www.the-star.co.k...th#sthash.gBES8uff.dpuf


My target price is 20 bob+ by June 2014.
This counter presents for me an upside potential of +45% within the next 6 months.

Fuel has declined much further and seems to be heading lower, if the fuel derivatives in their last FS are anything to go by, then they will report substantial profits from the contracts