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ASSESSING FACTORS CONTRIBUTING TO LOW PROFITABILITY MARGINS AT KENYA AIRWAYS BETWEEN THE YEAR 2009- 2012


Enos Bernabas Anene

Jomo Kenyatta University of Agriculture and Technology, Kenya

Patrick Gitonga Kiara

Jomo Kenyatta University of Agriculture and Technology, Kenya

Irene Kathambi A.

Jomo Kenyatta University of Agriculture and Technology, Kenya


ABSTRACT

The objective of the study was to establish causes for the low corporate profitability margins at Kenya Airways. The objective was to understand if the management style had an impact on the Kenya Airways (KQs) performance; to investigate if the impact of other world economical forces had impact on the company profit levels, to evaluate the impact of the cost on profitability level and to examine whether the fuel hedging has an impact on profitability level. Due to the continued significant financial losses that had been incurred over time; the share equity value at the stock market declined consequently causing shareholders loose on their wealth, it led to further resulted to low pricing and devaluing of the KQ wealth capital accumulation and the losses resulted to retrenchment of workers/employees. Hence it is from this reasons that the research come up with problem of the statement for these study of the KQ. The study used the survey research design this was because not much studies had been carried out on Kenya airways. The study used desk research, secondary data evaluation and internet. The data was analyzed and presented through use of descriptive analysis, and content analysis. The findings of study concluded that there was positive relationship between the impact of Euro-zone crisis and fuel hedging to Kenya airways Profitability that led to losses. The study recommended the need to search for new untapped emerging markets in Asia that will cushion against the economic downtimes of the Eurozone crises, to adopt new type of air carrier that is cost and fuel efficient that would in turn save on fuel cost to avoid hedging and losses in profits and to broaden strategic alliances with other airline industries in order to capture a larger market and enter into new markets.


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