The worldcup is now less than 12 months away,offcourse KQ's prospects have to be up there,with 18 weekly to amsterdam,10 to London and 20+ to joburg,plus the intra african routes,you can expect a bumper year for the airline.

Anybody with an idea of the forward bookings on the Joburg route? I expect increased schedules,full board and near criminal fairs for the duration of the WC.

The african air market is underserviced and it will be very difficult introducing scheduled flights to SA due to the complex aviation laws,that will leave the field for charter flights,KQ and SAA to gorge themselves.

With the clinical analysis funds use to determine investment opportunities,I am sure many foreighn funds have already done their mathematics.

SOMEONE LOAN ME A MILLION


I've noticed the youth in particular coming in to a workplace with a completely outsized notion of their own value and importance... just a thinly-veiled arrogance. May be the credit crunch induced recession is whats needed to remind us all about the value of hard work.... By Anonymous

@VVS,I actually like KQ and have been in and out of the share over the years and taken in some good profits. Nonetheless,I have now taken to speculating in the share rather than buying and holding.

For one,the industry has become a lot more volatile. E.g. Air France/KLM have just reported their 6th monthly drop in passenger and freight volumes.

I also feel that the company has become a lot less transparent e.g. the Investor briefing on their website for the 2008 results indicated that their fuel hedges were unwinding by December 2009.

I then attended this year's investor briefing only to discover that they had extended their fuel hedges to 2010 at a price that beggared belief and in a form that could not allow them to unwind them,if the price moved against them. Remember,there was no mention of this fact during their Half year briefing for the results for September 30th 2008.

The visibility on the share is also rather clouded e.g. it is really difficult to conlusively tell what the impact of the change in fuel price will do to their performance. I refer specifically to the rather complex graphs regarding the difference between the hedged price and the forward curve price. I postulate that the 7.5 bn was calculated on the basis of a gradually increasing oil price.

Although KQ has stated that the unrealised fuel derivative loss of Kshs 7.5 bn has no cash flow impact,I beg to differ. It only had no cash flow impact as at 31st March 2009. If the price remains below $109 a barrel the price difference has to eat into their cash,although not their income statement. As you observe,if the price of oil keeps falling KQ suffers. But they do not explain that clearly. They have also become rather stingy with their operating performance statistics which they used to provide very timely in the past.

Appreciation of the Kshs is definitely negative for KQ (on a net basis).

Having said that I would still be a buyer of KQ but I would definitely not chase the share,unless more information comes to light. I really hate it when I have to invest in the dark as KQ mgt seems to be intent on making me do!


Opportunity calls but few respond.

'I also feel that the company has become a lot less transparent e.g. the Investor briefing on their website for the 2008 results indicated that their fuel hedges were unwinding by December 2009.'

IMHO,they are more transparent after the new CFO came in... Not enough though. We can't let them slack off.

'I postulate that the 7.5 bn was calculated on the basis of a gradually increasing oil price.'

Actually,that is the case. They should have provided more info. The investor briefing (I was not there) was probably a quick flip-through the charts. Doesn't give analysts time to assess or question or analyse.

'Although KQ has stated that the unrealised fuel derivative loss of Kshs 7.5 bn has no cash flow impact,I beg to differ.'

I agree with KQ. As of 31 Mar 2009. I agree with you post 31 Mar 2009. The cash impact will have started immediately since oil trades way below $109/bbl... And more complexity since the hedges are not all based in oil prices but jet fuel.

And they can give us information on a quarterly basis. Not just performance stats. No need for Investor Briefings (which are WRONG since they lock out other shareholders). Are you a broker?

'Appreciation of the Kshs is definitely negative for KQ (on a net basis).'
Yes... I agree. Though the value of the aircraft in US$ will have dropped since the world is awash in planes... Supply > Demand

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB

Why don't the spaces between paragraphs show up when I post? I notice that affects some other folks as well... Please help...

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB

@MainaT: It seems KQ used a forward curve (ASSumption) to calculate the KShs 7.5 billion loss. So if they screwed up. Again. Then there are more realised & unrealised losses waiting in the wings. ***The presentation is on www.kenya-airways.com

Greedy when others are fearful,Very fearful when others are greedy - to paraphrase WB