Photo of Kenya Airways in the Sky. Photo/KQ
By Daisy Okiring
Kenya Airways (KQ) has reported a KSh12.1 billion net loss for the first half of 2025, with Chief Executive Officer Allan Kilavuka attributing the shortfall to a sharp reduction in fleet capacity that crippled revenue performance.
The national carrier’s financial report showed a 19% decline in revenues, falling to KSh75 billion for the six months ending June 30, 2025, compared to KSh91 billion over the same period last year.
Kilavuka said the grounding of several wide-body and narrow-body aircraft slashed the airline’s capacity by nearly 20%, undermining revenue collection by about KSh17 billion.
“Half-year results are less than optimal. We had a significantly reduced capacity for the first half of the year, and this translated into compromised revenues and a net loss of KSh12.1 billion,” Kilavuka told reporters, noting that the loss reflected operational realities rather than poor demand.
Aircraft Groundings Hit Bottom Line
According to the CEO, the grounding of major aircraft — some for maintenance and others due to financial constraints — had the biggest impact on the company’s earnings.
He said one of the grounded planes has since been restored to operation and more will progressively rejoin the fleet. “We are continuously bringing back the grounded aircraft. Additionally, we are looking forward to acquiring more planes to expand capacity,” he added.
The grounding affected some of the carrier’s key routes, particularly in long-haul operations where wide-body aircraft are critical, forcing KQ to cut frequencies and rebook passengers.
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Strategy to Return to Profitability
Despite the poor results, Kilavuka expressed optimism that Kenya Airways is on course to recovery. He outlined a series of strategic interventions aimed at stabilizing the business:
- Restoration of Capacity: Gradually returning grounded aircraft into service.
- Fleet Expansion: Exploring leasing or acquiring additional aircraft to improve frequencies.
- Cost Optimization: Implementing stringent measures to cut operational costs and improve efficiency.
- Capital Raising: Completing its capital restructuring program to strengthen the balance sheet.
“These measures will ensure that KQ emerges stronger, leaner, and better positioned to deliver long-term value for our shareholders, customers, and partners,” Kilavuka said.
Industry Outlook Supports Optimism
Kilavuka pointed to estimates from the International Air Transport Association (IATA), which projects global passenger traffic to grow by 5.8% in 2025. He said the expected increase in demand provides Kenya Airways with an opportunity to recover if capacity is fully restored and strategic measures are executed on time.
“The fundamentals of air travel remain strong. The demand is there. What we must do is ensure we have the aircraft and systems in place to capture that growth,” he emphasized.
Balancing Growth and Debt
Kenya Airways continues to battle legacy debts and operational inefficiencies, factors that have strained its financial health over the past decade.
While the airline has benefited from government support in recent years, pressure remains to reduce reliance on bailouts. Kilavuka said the current capital restructuring is designed to ease debt obligations while positioning KQ for sustainable growth.
“Our focus is not only on short-term recovery but also long-term financial health. We are rebalancing our books to ensure the airline remains viable and competitive,” he said.
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Shareholder and Customer Value
The CEO reassured stakeholders that KQ remains committed to serving its customers despite financial headwinds. He said improved efficiency, better service delivery, and optimized operations would remain central to the airline’s turnaround strategy.
“Kenya Airways is not just another company — it is a national symbol and a key contributor to our economy. We owe it to Kenyans, our shareholders, and our passengers to return this airline to profitability,” Kilavuka stressed.
What Lies Ahead
The half-year results highlight both the persistent challenges and the recovery potential of Kenya Airways. Industry analysts say the ability of the airline to restore capacity quickly, manage costs, and capture expected growth in global air travel will determine its recovery trajectory in the second half of 2025 and beyond.
For now, the management faces the delicate task of balancing fleet restoration, cost control, and capital restructuring while safeguarding the airline’s brand reputation in a competitive market.
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