Kenya Airways cargo revenue up 18% despite KShs 16.1bn loss

Kenya Airways PLC has delivered a mixed financial performance for the first half of 2026, recording a total revenue increase of 9% to KShs 81.25 billion, alongside a strong 18% expansion in its cargo division. However, this top-line growth was offset by intense global operational headwinds, leading to a loss after tax of KShs 16.1 billion for the six-month period ending 30 June 2026, compared with a net loss of KShs 12.2 billion in the same period last year.

A major bright spot in the airline's results was the cargo segment, which generated KShs 8.77 billion in revenue, up from KShs 7.46 billion in the prior period. The 18% year-on-year growth reflects the carrier's deliberate commercial focus on expanding its freight activities across regional and international routes. To capitalise on this momentum, Kenya Airways has pursued additional Boeing 747 Freighter capacity, aiming to increase its cargo market share significantly from 11% to 40%. This growth strategy positions freight operations as a vital pillar for the group's long-term revenue diversification and stability.

Despite robust demand, operational margins were severely compromised by a challenging macroeconomic environment and sharp increases in operating expenses. Total operating costs escalated by 14% to KShs 91.90 billion, pushing the group into an operating loss of KShs 10.64 billion. The primary driver was a global surge in jet fuel prices, exacerbated by geopolitical friction in the Middle East. Global jet fuel prices experienced a 66% year-on-year surge, averaging $142 per barrel, with extreme spikes reaching $213 per barrel during March and April 2026. For Kenya Airways, jet fuel costs jumped 32% year-on-year, consuming approximately 32% of total operating expenses and 52% of direct operating costs.

Compounding the elevated fuel costs were severe global supply-chain bottlenecking and aircraft availability constraints. Grounding issues and engine turnaround delays lasting between 90 to 120 days restricted fleet deployment, causing total Available Seat Kilometres to fall by 9% and total block hours to drop by 8%. Nevertheless, commercial efficiency remained high. Passenger cabin factor improved by nearly four percentage points to 76.3%, supported by strong average coupon values and high fleet utilisation rates. Notably, Kenya Airways achieved the third-highest global utilisation rates for its Boeing 787 and Boeing 737 fleets, and the highest in the world for its Embraer E190 aircraft.

Looking ahead, Kenya Airways management, led by Chairman Kiprono Kittony and Acting CEO Dr George Kamal, is prioritising fleet restoration, cost reduction, liquidity preservation, and a strategic capital raise to stabilise its financial foundation. The carrier has already begun welcoming back key widebody aircraft, including a Boeing 787-8 in mid-July 2026 and a Boeing 777-300ER, which will restore capacity and bolster operational flexibility across its international network. Alongside commercial achievements such as a 20% expansion in its Asante Rewards loyalty scheme to over 300,000 members, the national airline remains focused on transforming operational hurdles into sustainable recovery.