Kenya Airways, like any other airline, operates in a highly competitive and volatile industry. Several factors contribute to the company's ability to make a loss of Kshs 21.7 billion while still reporting an operating profit of Kshs 998 million in their half-year results. These factors include revenue streams, operating expenses, and non-operating items.

1. Revenue Streams: Kenya Airways generates revenue primarily through passenger and cargo operations. However, due to the COVID-19 pandemic, travel restrictions, and reduced demand for air travel, the company experienced a significant decline in passenger revenue. This decline in revenue was further exacerbated by the grounding of its fleet during the lockdown period. As a result, the company's overall revenue declined substantially, contributing to the reported loss.

2. Operating Expenses: Operating expenses play a crucial role in determining a company's profitability. Kenya Airways incurs various costs, including fuel, maintenance, labor, and aircraft leases. These expenses are relatively fixed, regardless of the level of revenue generated. Therefore, even if the company manages to generate some revenue, it may not be sufficient to cover all its operating expenses, resulting in a loss.

3. Non-Operating Items: Apart from its core operations, Kenya Airways may have non-operating items that impact its financial performance. These items include foreign exchange losses, impairment charges, restructuring costs, and one-off expenses. Such non-operating items can significantly affect the company's profitability, even if its operating activities generate a profit.

It is worth noting that the operating profit of Kshs 998 million reported by Kenya Airways in their half-year results represents the profitability of their core operations. This figure accounts for revenue generated from passenger and cargo operations minus the direct operating expenses associated with those operations. However, the overall loss of Kshs 21.7 billion includes non-operating items and other expenses that are not directly related to the core operations of the airline.

References:

1. Kenya Airways Half Year Results 2020: https://www.kenya-airways.com/investors/financial-results/
2. "Kenya Airways Reports Kshs 21.7 Billion Half-Year Loss" - Capital Business: https://www.capitalfm.co.ke/business/2020/11/kenya-airways-reports-kshs-21-7-billion-half-year-loss/