Kenya Airways lifted first half revenue 9% to KShs 81 billion for the six months to June 30, 2026, even as a smaller fleet and a sharp jump in fuel prices drove the airline deeper into loss.
The national carrier told investors in Nairobi that demand for its network held firm despite operating with 9% less capacity than a year earlier. Stronger aircraft utilization and commercial performance lifted cabin factor by 3.9 percentage points to 76.3%, while average fares held their strength across the network.
“We grew revenue by 9% to KShs 81 billion despite operating with 9% less capacity,” said Dr. George Kamal, acting Group Managing Director and Chief Executive Officer. He added that the cabin factor gain and strong coupon values confirm that demand for the airline’s routes remains resilient.
Fuel Prices Erase the Revenue Gain
Revenue growth wasn’t enough to protect the bottom line. Jet fuel prices climbed sharply through the first half, driven mainly by geopolitical tensions in the Middle East, and pushed Kenya Airways’ fuel bill up 32% year on year, leaving the airline exposed to a $225 million fuel bill for the period.
Fuel now makes up roughly 32% of total operating expenses and 52% of direct operating costs, a level that squeezed margins across the business. Layered on top of that, global supply chain constraints, including shortages of spare parts and longer lead times for components, limited aircraft availability and hurt operational reliability.
Total operating costs rose 14% for the period. The combined effect of higher fuel spend, supply constraints and reduced capacity pushed Kenya Airways to a loss after tax of KShs 16.1 billion, up from KShs 12.2 billion in the same period last year, with the airline reporting a pre tax loss of KShs 15.92 billion ($123.08 million) against KShs 12.17 billion in the same period a year earlier.
Fuel Hedging Appetite Dries Up
Persistent uncertainty in global oil markets, driven largely by the Iran conflict, has curbed appetite among investment banks and commodity traders to offer fuel hedging contracts, depriving Kenya Airways of a key risk management tool at a time when jet fuel prices spiked sharply. A fuel hedge allows a fuel consuming company to secure the commodity at a fixed price, protecting its budget from wild price swings.
“Until January 2026, we had started the year with a lot of power based on increasing load factor. In March and April, however, the price of oil spiked going to as high as $213 per barrel and that was about 72.0 percent higher than the average for January and February. We tried to surcharge this rise but could only do up to about 15 percent or 20 percent,” Kamal said in an interview with The EastAfrican.
“Looking into the second half of year, the forward curves don’t point to the price going to the highs of $213 per barrel again, it will likely be within the range $140 to $160. Currently we do not have any fuel hedge in place and the reason is that there’s very low appetite from the counterparties especially when there is a lot of volatility in prices. You don’t do that at a time like now because that will be a major risk you are taking. We will, however, continue reviewing and at an appropriate time we could hedge,” Kamal said.
Kenya Airways’ acting Chief Financial Officer, Mary Mwenga, said the airline’s strategy for the rest of the year is hinged on increasing capacity to drive up revenues by double digits and counteract any further pressure that may come from the price of oil.
Half Year Results at a Glance
| Metric (KShs million) | H1 2026 | H1 2025 |
|---|---|---|
| Total income | 81,254 | 74,504 |
| Total operating costs | (91,895) | (80,743) |
| Operating loss | (10,641) | (6,239) |
| Loss before tax | (15,923) | (12,173) |
| Net loss after tax | (16,075) | (12,154) |
| Available seat kilometers (million) | 6,084 | 6,715 |
| Cargo revenue | 8,768 | 7,461 |
| Cabin factor | 76.3% | 72.4% |
| Block hours | 65,978 | 72,040 |
Cargo was a bright spot. Revenue from the segment grew 18% year on year, supported by the airline’s push to expand freighter capacity and grow its share of the African cargo market from roughly 11% toward a longer term target of 40%.
Chairman Points to Recovery Plan
Kiprono Kittony, named Kenya Airways Chairman earlier this year as part of a wider board refresh, framed the results as the cost of operating through what he called an exceptionally challenging environment, while pointing to a recovery plan already underway.
“Our focus now is firmly on recovery and building a stronger Kenya Airways,” Kittony said. He listed rigorous cost management, cash conservation, restoring fleet capacity, reducing leverage and completing the airline’s capital raise as the priorities meant to put the carrier on a more stable footing for long term growth.
Investor Search Under Way
Kenya Airways expects to have concluded a deal with a strategic investor within nine months, working with audit and management consultancy KPMG to generate an investor memorandum inviting bids from interested parties. The airline said it is open to an arrangement involving a mix of investors, including but not limited to those targeting equity, debt, and joint ventures focused on its day to day operations.
Kenya Airways has also been grappling with constrained capacity owing to supply chain challenges in the global markets, which has left parts of its fleet grounded due to difficulty securing spare parts at the right price and within the required time. The airline’s top leadership said it is conducting an internal study to help optimise its network given the capacity constraints it faces.
Fleet Capacity Set to Recover
There’s already a concrete sign of that recovery. One Boeing 787 8 returned to service in mid July 2026, and a Boeing 777 300ER has been redelivered and rejoined the Kenya Airways fleet, both events landing after the close of the reporting period. Khusoko reported that the 400 seat jet returned to the Nairobi to London Heathrow route on July 17, 2026, ending a decade in which it flew for other carriers after Kenya Airways subleased it out during an earlier restructuring push.
“What we have done is to collect data to help us determine which routes are most viable and which routes can take which aircraft for revenue optimisation. For example, today we are operating the Boeing 777 to London. Tomorrow, after the high season, we might have to transfer it to a different route which is having a high season at that time,” Kamal said.
Management expects the added capacity to strengthen network resilience, improve scheduling flexibility and let the airline capture more demand as market conditions ease. The company’s near term priorities center on restoring fleet availability, cutting costs while protecting liquidity, improving reliability and utilization, and completing its planned capital raise.
Kittony said the carrier intends to keep a disciplined approach to capacity and spending while staying ready to move quickly once conditions improve. Kenya Airways connects more than 5 million passengers and over 70,000 tons of cargo a year through its Nairobi hub, and as the sole African member of the SkyTeam Alliance, it links customers to more than 1,060 destinations in 173 countries. With aircraft returning to the fleet and a capital raise in progress, the airline is betting that the second half of 2026 marks the start of its climb back toward profitability.
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