Budget carrier Jambojet sunk into a substantial loss last year, largely driven by negative currency movements, which has stopped it from contributing to the profitability of its parent firm Kenya Airways (KQ).
The national carrier says in its latest annual report that the subsidiary’s tax losses –representing losses from specific business lines and which can be used to reduce tax liabilities in the future— rose to Sh3.94 billion in the review period from Sh2.92 billion in 2023.
KQ does not publish financial statements for the subsidiary but the tax losses indicate that Jambojet made a substantial loss in the review period.
The Nairobi Securities Exchange-listed firm attributed the budget carrier’s performance to negative foreign exchange movements.
“The main driver for the increment in tax losses for Jambojet was due to forex gains and forex losses,” KQ’s acting chief financial officer Mary Mwenga said in response to our queries.
“In 2023 there was an unrealised loss for the year amounting to Sh2.8 billion, which was realised in 2024 and adjusted in the tax computation. In addition, 2024 had an unrealised gain amounting to Sh1.7 billion, which also contributed to the increase in tax loss.”
Jambojet’s accumulated tax losses stood at Sh3.26 billion in 2022. An accumulation of tax losses indicates continued lack of profits against which the tax losses are to be used to lower the obligations to Kenya Revenue Authority.
KQ, for instance, got a tax benefit in 2024 when it posted a net profit of Sh5.4 billion after years of losses.
The national carrier received a tax credit of Sh95 million in the review period when –under ordinary circumstances— it should have paid an income tax of about Sh1.65 billion on the pre-tax profit of Sh5.52 billion.
This resulted in a reduction of the company’s accumulated tax losses.
“As at 31 December 2024, Kenya Airways Plc and JamboJet Limited estimated tax losses amounted to Sh152,434 million and Sh3,947 million respectively (2023: Sh159,345 and Sh2,929 million respectively),” KQ said in the report.
“From 1st July 2021, Kenyan Income Tax laws allow for carry forward of tax losses indefinitely. The accumulated tax losses will be utilised to offset future taxable profits.”
Jambojet has faced increased competition in both local and regional markets.
The airline currently flies to more than 10 destinations --including flights to Eldoret, Kisumu, Lamu, Malindi, Mombasa, and Ukunda locally, and Kigali, Goma, Mogadishu, Zanzibar, and Entebbe regionally.
Its routes to the region face intense competition from RwandAir, Air Tanzania, Uganda Airlines, Precision Air, and Skyward among others which also eye budget travelers across the region. Jambojet has a fleet of eight aircraft, each with a capacity of 78 to 82 passengers, all having an average age of 3 years.
