Kenya Airways widened its half-year pre-tax loss to Ksh21.7 billion in the first half of the year from Ksh9.9 billion previously on the back of a weaker shilling.

Addressing investors on Tuesday, the airline said foreign exchange losses jumped to Ksh15.3 billion from Sh398 million in the same period in 2022.

“The debt is worsened by the 14 percent devaluation of the Kenyan shilling against the dollar since January, which we have had to book as foreign exchange losses. The devaluation of the Kenya shilling has a significant negative impact on our financials as a majority of our transactions are carried out in the major foreign currencies,” said Allan Kilavuka, the carrier’s chief executive officer.

“The reason why this has a significant impact on our results is because we have a lot of legacy debt, about $1 billion of debt, and when you reconvert it using the new exchange rates, it hits your P&L.”

KQ chief executive officer (3rd left) with officials from Delta Airlines. (Photo:KQ)
KQ chief executive officer (3rd left) with officials from Delta Airlines. (Photo:KQ)

Kenya’s currency has hit record lows in recent days leading to costly imports as the country relies on imports for some of the key commodities.

However, the carrier recorded an operating profit of Ksh998 million, the first in the last six years, giving the management hopes of returning the airline to profitability by 2024.

The growth equates to a 120 percent improvement in operating profit from a loss of Ksh5 billion recorded in the corresponding period last year.

Kenya’s national carrier said the improvement was boosted by passenger charters, ramped-up scheduled operations, partnerships with other airlines, lease rental renegotiations and other cost-reduction measures.

The airline’s revenue grew by 56 percent in six months to June to Ksh75 billion on the back of an increase in passenger numbers that stood at 2.3 million in the review period from 1.6 million last year.

Mr Kilavuka said the growth in operating profit was an indication that the carrier is on the path to profitability.

“This growth is an indicator that we are on the way to achieving our target of becoming profitable by 2024,” he said.