Kenya Airways (KQ) has reported a staggering Ksh.12 billion loss in the first half of the year, a sharp and painful reversal from the Ksh.513 million net profit it recorded in the same period in 2024. The national carrier's revenues plummeted by 19 per cent, from Ksh.91 billion to Ksh.74 billion, as a significant number of its aircraft were grounded, leading to a sharp decline in passenger numbers and available seat capacity.
The airline’s CEO, Allan Kilavuka, has been transparent about the reasons for this financial turbulence. The primary cause of the sharp decline is a combination of reduced capacity and a critical shortage of spare parts. According to Kilavuka, three of the airline’s nine long-haul Dreamliners were grounded from January to July due to a shortage of engines that had been sent for overhaul. This left the airline operating at 20 per cent below its normal capacity, a crippling blow to its bottom line.
A number of the airline's narrow-body aircraft were also grounded. To make matters worse, the company was unable to bring in new aircraft to replace the ones it was retiring due to a market-wide shortage. "Of the four that we were hoping to bring, we were only able to bring one," Kilavuka said, highlighting the immense challenges the airline is facing in a tough global market.
The financial strain is exacerbated by the high cost of engine overhauls, with each costing about USD 15 million and taking up to four months to complete. As a largely illiquid company, Kenya Airways finds itself at a significant disadvantage. The CEO noted that the airline cannot "jump the queue" for repairs, as some companies can finance the "fast-tracking" of their overhauls. This leaves KQ in a precarious position, waiting for engines to be returned, while its crucial long-haul aircraft remain on the ground.
Despite the gloomy numbers, there is a glimmer of hope. The airline has successfully returned one of its grounded Dreamliners to service, with the remaining two anticipated to follow suit later this year. Optimism for a second-half recovery is high, bolstered by the strong performance of newly launched routes, including London Gatwick and Nairobi to Abidjan.
Kenya Airways maintains that this turbulence is temporary. The airline says it plans to raise approximately USD 500 million in the later half of the year. This capital will be used to fuel expansion, including new aircraft acquisitions, and to return the airline to profitability. While the path ahead is challenging, the airline remains committed to its long-term strategy of recovery and growth. For now, all eyes are on the national carrier as it works to navigate these difficult headwinds and get back on a stable flight path.
