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KQ issues profit warning on lower passenger numbers
A KQ plane at a parking bay at JKIA.
Photo credit: File I Nation Media Group
National carrier, Kenya Airways (KQ), has announced a profit warning for its full year earnings for the period ending December 2025, attributing it to a drop in passenger numbers following grounding of some of its large aircrafts.
The cautionary statement means the airline's net profit for the period will be lower by at least 25 percent or Sh1.35 billion compared to the Sh5.4 billion net profit posted in the year to December 2024.
KQ reported a half year net loss of Sh12.15 billion, compared to a Sh513 million profit after tax reported in the same period in 2024 citing grounding of 33 percent of its wide-bodied aircraft as the main cause.
“The board brings to the attention of the public that the earnings for the current financial year 2025 are expected to be lower by at least 25 percent than the earnings reported for the same period in full year 2024,” said KQ in a public statement.
The airline blamed the grounding of its three Boeing 787-8 Dreamliner aircrafts to constrained supply of spare part supply in the global market as well as aircraft shortages.
KQ management said the grounding of the Dreamliners, which constitutes 33 percent of its wide body fleet, had impacted its performance due to reduction in capacity and drop in passenger numbers.
Last year the company carried 5.2 million passengers and hauled 70,776 cargo tonnes.
KQ had been in the red for 11 years which had seen its accumulated losses rise to Sh189.7 billion and left it with a substantial working capital deficit. Last year saw it break the trend to turnaround a Sh22.7 billion net loss in 2023 to record a profit on the back of reduced debt service costs.
KQ’s management opened the window for another round of capital raising in an effort to pull up from loss territory.
“The board and management remain committed to recovery efforts, including returning grounded aircraft to service, cost reduction and executing partnerships and capital raising initiatives aimed at stabilizing operations and improving the company’s financial performance,” said the company.
KQ has been in the search for a new equity investor to provide a significant cash injection to stabilize its performance and ensure the long term stability of the carrier. However the search for a strategic investor has stalled as the majority shareholder – the government of Kenya – weighs options to calm the turbulence that the national carrier faces.
KQ joins a growing list of listed companies that have issued profit warnings signaling a difficult economic period.
Companies that have issued profit warnings include Standard Chartered Bank of Kenya, recently listed packaging materials manufacturer Shri Krishana Overseas Limited (SKL), and TPS Eastern Africa which manages Serena Hotels.
Stanchart’s expected profit drop is due to a one-off settlement of a claim on a pension fund by 629 former employees of the bank which will cost the lender Sh7.2 billion to settle.
SKL had cited a spike in financing cost following an uptake of new loans for the change of fortune while service provider TPS Eastern Africa noted last year it had benefited from unrealized forex gains which it did not expect this year.
