National carrier Kenya Airways (KQ) has ended its decade-long streak of losses, reporting a net profit of Sh513 million for the half year ending June 2024.
The turnaround is attributed to a significant reduction in debt service costs following the government’s takeover of the airline’s $641.4 million (Sh82.7 billion) loan.
The airline last recorded a profit in the half year to June 2013, experiencing consistent losses since then. The latest profit represents a significant reversal from the Sh21.7 billion net loss reported in the same period last year.
KQ’s improved performance is primarily due to a 97% drop in other expenses, which plummeted to Sh687 million from Sh22.8 billion in the previous year. This dramatic decrease was driven by the government’s intervention, which saw the loan converted into a Kenya shilling facility with extended terms. This move reduced the airline’s exposure to foreign exchange fluctuations and provided much-needed financial stability.
“The loan is now a Kenya shilling facility which reduces the exposure from a currency fluctuation perspective,” said KQ’s Chief Finance Officer Hellen Mwaniri. “This was the biggest loan in our book and hence any movement in the exchange rate had a significant impact on KQ financials.”
Further contributing to the turnaround, the airline maintained an operating profit of Sh1.2 billion, a slight increase from Sh998 million in the same period last year. Revenue also climbed to Sh91.4 billion from Sh75 billion, with operating expenses rising at a slower pace to Sh90.1 billion from Sh74 billion.
“We had an intention of breaking even in 2024 in our journey to recovery,” said KQ’s CEO Allan Kilavuka. “We had already recorded an operating profit (full year 2023), and we had targeted our first net profit.”
This news marks a crucial step in Kenya Airways’ long-awaited recovery journey and signals a promising future for the national carrier.
