UPDATE 2-Kenya Airways hit by oil price, political crisis
* Pretax profit down 63 pct to 1.05 bln shillings
* Blames oil price, currency, post-election crisis
* Revenues up 12 pct (Adds comments on outlook, background)
NAIROBI, Oct 30 (Reuters) - Kenya Airways (KQNA.NR), one of Africa's leading airlines, reported on Thursday a 63 percent drop in first-half pretax profit on high oil prices, a strong shilling and the post-election crisis earlier in the year.
It recorded a 1.05 billion shilling ($13 million) profit before tax for the first half of its financial year ended September, compared with 2.8 billion a year earlier.
"We have remained profitable, despite the circumstances," chief executive Titus Naikuni told investors.
Pretax earnings per share for the Nairobi bourse blue chip fell to 2.28 shillings from 6.11 in the first half of 2007 financial year. Total revenue rose 12 percent to 34 billion shillings from last year's 30.3 billion shillings, Naikuni said.
Aviation has been hit hard by high fuel prices, which reached a high of $147 per barrel in July, but have since fallen more than half.
"As a consequence, fuel cost represented 39.1 percent of all costs, up from 27.8 percent in the prior year," said Naikuni.
He added that violence following December's disputed presidential election, which left more than 1,300 people dead and scared away tourists, had pushed passenger numbers down.
When the crisis was resolved in April after the formation of a coalition government, the shilling strengthened significantly against the dollar, chipping away at the airline's revenues, which are mainly dollar-denominated.
The currency continued on a strong path for several weeks, thanks to optimism surrounding the region's biggest share sale, in mobile phone company Safaricom (SCOM.NR).
Naikuni said outlook for the second half was positive, as passenger numbers were now at or ahead of the same period last year, though the global economic turmoil could affect performance.
"We have started seeing a negative effect around (passenger) numbers from Europe, not major to drive us to a situation where we say 'withdraw from the route', but it is significant."
He said the firm was focusing on investment to train its 4,300 employees, install systems to automate processes, and stabilise its fleet of Embraer and Boeing planes.
Kenya Airways is struggling to replace its fleet of ageing Boeing 767s, after delays in delivery of the more fuel efficient 787, Naikuni said. Dutch carrier KLM, part of Air France KLM (AIRF.PA), has a 26 percent stake in Kenya Airways. (Editing by Will Waterman)
