Kenya swings to half year profit despite challenges

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Kenya Airways turned a KSh5.5 billon ($63.8 million) operating loss for the first six months of 2012 into a KSh 1.7 billion profit for the period ending 30 September despite the twin challenges of a major fire at Jomo Kenyatta International airport (JKIA) base and the Westgate shopping mall terrorist attack.

Net profit for the period was KSh384 million compared to a KSh4.79 billion loss the year before as “stabilisation of Eurozone economies, favourable prices of jet fuel" and a "robust business environment” in Kenya following peaceful elections boosted sales.

Revenues rose from KSh49.8 billion last year to KSh54.3 billion aided by a 5% increase in passenger yields and domestic capacity lifted almost a fifth. Direct operating costs fell from KSh 39.9 billion to KShs 37.3 billion thanks largely to a 10% decrease in the cost of jet fuel and cost cutting efforts.

Kenya says the JKIA fire in August slowed traffic growth and affected “the flow of transit passengers through Nairobi and most of the traffic originating from other countries” while the Westgate Mall attack in the Kenyan capital in September led to a “traffic dip especially after some countries issued advisories against travel to Kenya”.

While figures were not released calculating the cost of both incidents on revenue, at the time Kenya Airways stated the airport fire had cost it $4 million in lost revenues.

Political unrest also saw Kenya suspend operations to Libreville, Gabon, Bangui in Central African Republic, Ouagadougou, Burkina Faso and Cairo, Egypt. But new routes were opened to Livingstone, Zambia, Abu Dhabi in the UAE and Blantyre, Malawi.