I am actually revising my expectations downwards after seeing the operational statistics for the 2nd Qtr.

KQ generates roughly 50% of its operating profits from Africa yet PLF on intra-African routes have remained constant. So we can't expect much growth in profits on that front i.e. the Africa sector, barring changes in other variables.

In addition even though cargo contributes less than 10% of revenue, the contribution of freight, mail and others to operating profits has been just shy of 50% in recent years. The Operating stats show that during the first half of the year, this has only grown by 2.1%. So unless they have been able to grow the yields on cargo, I am also tempering my expectations on account of this.

@Mwanahisa lemme take you to school...if an airline with 100 seats flies a distance of 1000 km the ASK are 10000 if 60 passengers,km travelled is 60000 therefore PLF is 0.6 so PLF has nothing to with revenue but utilisation of capacity.

RPK is calculated by multiplying the total no of revenue paying passengers aboard a plane by the distance travelled measured in Km...its actually the measure of sales volume of passenger traffic...

Note 3 (Segmental Information) to KQ's 2009-10 Annual Report and Accounts.

RPKs are important but the corelation between RPKs and Operating Profits is not exactly linear. Higher RPKs with lower PLFs could still result in operating losses.

Generally the more passengers flown and the longer the distances they fly results in higher revenues and higher operating profits. That is, if operating costs are kept constant or rise lower than proportionate to the increase in revenue.

Kindly note my emphasis on operating profits which do not take into account Finance costs/income, gains/losses on fuel derivatives etc.

By the way, I am hoping that the average fares paid on the African routes actually went up in H1 2010-11 due to the World Cup as well as the ongoing recovery from the 2008-09 Global Financial Crisis.

@the deal, I will actually be deeply dissapointed if H1 2010-11 operating profits ONLY double from those of last year's H1.

In an earlier post, I indicated that I expect them to rise more than 10 fold for the first half in comparison to last year. I gave my rationale in that post.

@mwanahisa - If the profits 10x last year... I will be very, very happy!

Yes, low PLFs are not a good thing but KQ increased capacity 12% into Africa thus the PLFs remained the same even with increased passengers. Flying to Africa is already expensive. I can fly NBO-LHR cheaper than NBO-Lusaka or Accra!

The taxes are crazy. Accra has $80 passenger tax. Flying NBO-DSM is the same! The taxes are higher than the fare!

As Africa gets out of the 'crisis' caused by the Global meltdown in 2009, I expect the PLFs to improve in Africa. Add KQ's new flights to Middle East & Europe which make NBO a desirable hub coz of KQ.

Bottomline: KQ should expect better passenger numbers as long as it expands its destinations + alliances (codeshares). It is a pity KQ does not service the USA market coz #3 source of tourists to Kenya

DUBAI (Zawya Dow Jones)--Emirates AirlineEmirates AirlineLoading..., the Middle East's largest carrier, Monday reported a more than four-fold increase in first-half net profit as it invested in new aircraft and carried more cargo and passengers.

Profit for the period rose to 3.4 billion U.A.E. dirhams ($926 million), from AED752 million in the year earlier period, the airline said in an emailed statement. Revenue for same period swelled to AED26.4 billion, from AED19.5 billion a year ago.

"We continue to invest our profits in growing the business and our healthy financial position enables us to successfully meet all of our financial commitments and raise financing for future aircraft deliveries," said Emirates AirlineEmirates AirlineLoading... Chairman Sheik Ahmed bin Saeed Al Maktoum.

The surge in Emirates' earnings shows that carriers in the Middle East have been able to weather one of the worst year's for the global aviation industry.

Airlines in the region saw the highest growth rate of 11.2% in air passenger traffic for 2009. Industry body International Air Transport Association expects global airlines will show a combined profit of $8.9 billion this year, a small recoup of the early $50 billion [airlines] lost over the previous decade.
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The Middle East is energizing the global aviation industry, read how here:

Emirates said Monday it carried 15.5 million passengers in the first six months of the year, a 17% jump compared with the year ago period.

The airline's passenger seat factor came in at 81.2%, the highest ever for a first six month reporting period.

"Premium class seat factors have also risen by 2.6 percentage points, reflecting an encouraging change in the global economic outlook," the company said.

Emirates said revenue from its SkyCargo division surged 48% to AED4.4 billion in the first half, while cargo tonnage rose 24% to 897,000 tons, compared with 725,000 tons a year ago.

According to its website, Emirates currently operates a fleet of 149 aircraft--a mix of 142 Airbus and Boeing passenger aircraft and seven freighters. It's total order book stands at 204 aircraft, all wide body, and worth over $68 billion.

http://www.zawya.com/Sto...cfm/sidZW20101101000063

This is a phenomenal airline! Compared to KQ, these guys are like a rocket to our snail

This is always the rub. In many cases companies deliver good results, but investors do not think they are good enough and dump the share. Conversely, when poor results are expected and are duly achieved, the share price does not fall as expected. This has recently happened in the case of EAPC, EA Cables and KenGen.

In KQ's case, I think expectations are not too high.

If you look at the share price, it has traded in a range from 42.50 to 48 over the last couple of months and is currently trading at the midpoint of that range, with fairly muted demand. I do not think this is indicative of high expectations.

1Q 2010-11 was tough for KQ... Will it have made enough in 2Q to cover the poor 1Q?

The Global Economy was still weak in 1Q though it had started picking up...

Since you are on a roll... Please give us 1Q 2008-9 through 2Q 2010-11 passenger stats!