Kenya Airways has signaled severe financial turbulence, warning investors that its full-year earnings for 2025 will drop by at least a quarter compared to the previous year. The alert erases the optimism from a historic profit in 2024, thrusting the airline's stability and the value of the taxpayer's stake back into the spotlight.

The national carrier’s board directly attributes the nosedive to “severe operational disruptions” caused by a global shortage of spare parts and engine availability challenges. This has resulted in the grounding of three of its nine Boeing 787-8 Dreamliners, which form the backbone of its crucial long-haul routes.

A Sobering Reversal of Fortune

This downturn is a harsh reversal after the airline posted a KES 5.4 billion net profit in 2024, its first in over a decade. However, the impact of the grounded fleet was painfully evident in the first half of 2025, when KQ reported a staggering KES 12.1 billion net loss, wiping out the KES 513 million profit from the same period in 2024. Passenger numbers fell by 14% to 2.2 million in those six months as the airline's capacity shrank.

The grounding slashed the airline's capacity by an estimated 20%, costing it approximately KES 12.6 billion in lost revenue in the first half of the year alone, according to CEO Allan Kilavuka. “For a relatively small airline like us, losing 20 percent of capacity really hurts,” Kilavuka noted.

Global Supply Chain Woes Hit Home

Kenya Airways is not alone in this crisis; the global aviation industry is grappling with significant supply chain bottlenecks. Manufacturers like Boeing and Airbus are struggling to meet demand for new aircraft and parts due to shortages of raw materials and skilled labor. This industry-wide problem has several direct consequences for Kenyans:

• Reduced Connectivity: With a third of its wide-body fleet grounded, KQ's ability to service popular international routes to Europe, the US, and Asia is severely hampered.
• Potential Fare Hikes: Reduced capacity on high-demand routes often leads to higher ticket prices for travelers as airlines struggle to meet passenger numbers.
• Economic Impact: The airline is a critical enabler for Kenya's economy, contributing an estimated $2.6 billion (approx. KES 338 billion) to the GDP and supporting key sectors like tourism and horticulture exports.

While one of the grounded Dreamliners has returned to service, the other two are expected later in the year, suggesting the financial pressure will continue. The board has affirmed its commitment to recovery efforts, including cost reduction and strategic partnerships to stabilize the company's finances. Yet, with the airline already planning a $500 million (approx. KES 65 billion) capital raise to stay afloat, the path back to clear skies remains fraught with challenges.