Leases, looting and a grounded fleet expose turbulence at KQ

On clear mornings, a Kenya Airways Boeing 787 Dreamliner can be seen surging over the Ngong Hills, tail emblazoned with the bold crimson colours of the national flag.

An enduring symbol of Kenyan machismo, KQ represents “The Pride of Africa” – the connection between East Africa’s largest economy and the world. Yet for nearly a decade, this symbol has been teetering on the edge; battered by chronic financial distress, strategic missteps, and, in recent years, persistent and mind-bending unreliability.

Moses Kimani was, for instance, set to fly to his workstation in the United Kingdom via London’s Gatwick airport. But forty minutes before boarding, an ominous phone message popped up on his screen:

“KQ regrets to inform you that your upcoming flight KQ108 to LGW on 12 Jan has been cancelled. Rest assured (that) we are working on an alternative and will provide an update shortly.”

It was the third time Airways (KQ), whose eleven aircraft are grounded, had canceled flights to London that week. An internal memo leaked to The Standard paints a grim picture: With the company’s long-haul airplanes grounded in 2025, and more expected to be grounded this year, more flight delays and cancellations are inevitable.

“As of 2025, three Boeing Aircrafts remain grounded due to delayed engine overhaul. Additional groundings are expected in 2026 as landing gear and D-Check maintenance become due. This situation has constrained revenue generation capacity and increased fixed costs, further undermining financial performance,” reads the memo.

While the memo asserts that the network has been adjusted to align with aircraft availability and cash constraints, it concedes that increased disruptions due to flight cancellations and combined operations occur on key routes, with the Nairobi-Mombasa route suffering 20 weekly flight reductions.

Insiders who spoke to The Standard, however, reveal that grounded aircraft are not only an inconvenience for passengers and a loss of critical revenue but also a lucrative opportunity for theft and vandalism by corrupt employees.

“If plane X needs a new alternator, a new alternator is bought from a company abroad. Unfortunately, the companies selling the parts to KQ are owned by insiders, so the parts needed are simply vandalised from another plane and passed off as new, imported parts,” reveals our source.

“A Boeing engine is about $10 million (Sh1.3 billion), so imagine how much money crooks at KQ make from vandalising planes. As we speak, 11 planes are sitting on the tarmac for lack of parts. But even if the parts were bought, these grounded planes will need newer parts that have already been vandalised from them. The team at KQ learned from their bosses. The big bosses steal when leasing aircrafts and supplies, and the small people steal by vandalising planes,” says our source.

Acting Kenya Airways CEO George Kamal, in an opinion published in this paper, points to operational difficulties that have caused delays in flights or cancellations altogether.

“Even with a finely tuned network, some of the disruptions wrought by the pandemic persist. Chief among them is a global squeeze in the aviation supply chain. Aircraft sent for routine maintenance are taking longer to return to service, delayed by shortages of critical spare parts. KQ has not been spared. Several aircraft due back in service have been held up, compounding operational strain,” writes Captain Kamal.

While acknowledging the airline has not been spared the maintenance headache, a KQ director who is not authorised to peak to the media, said it is an accepted practice across the aviation industry to take parts from one grounded aircraft to put in another.

The official said only 6 aircrafts were grounded. “One has been sorted and it now operational. The other one is getting parts this week and will be in the skies soon. The rest are grounded... Someone can think they are stealing parts but that’s not the issue. They are picking viable parts from grounded aircraft to put in other aircrafts. Its acceptable industry practice.”

Not surprisingly, the Kenyan taxpayer has repeatedly pulled the national flag carrier from the brink, with this management by crisis pattern culminating in an abrupt board decision to replace Mr Allan Kilavuka with Egyptian Kamal as chief executive.

There is also a deal to saddle the national carrier with Boeing 737 MAX aircraft at inflated rates—reportedly over Sh60 million ($450,000) monthly for a 12-year term on a five-year-old plane.

But insiders and professionals are questioning why KQ is eager to pay more for old jets when better bargains for new and old jets are available. Multiple aviation sources in the Middle East reveal that brand-new MAX jets are leased for under Sh55 million ($400,000) a month while older models from Dubai and Qatari lessors go for Sh49-52 million ($350,000-$370,000). Qatar Airways itself is offloading similar MAX 8s for around Sh52 million ($370,000).

Existing fleet

An insider explains that rather than channel the funds into overhauls for existing fleet—engines already serviced and ready—management would rather lease aircraft to please shareholders. 

“This isn’t just expensive; it’s reckless for an airline already bleeding cash,” a Wilson Airport aviation operator told The Standard anonymously.

These developments have ignited fierce debate among KQ staff, with critics questioning whether installing an external CEO signals desperation or strategic renewal for the flag carrier, and whether the Avalon Leasing deal is a new gravy train.

“Right now, we have a foreigner as CEO. The head of KQ Cargo is an Ethiopian. Do you see Egyptians or Ethiopians employing Kenyans in strategic positions? Are we suggesting that Kenyan executives aren’t up to the task?” says KQ insider. 

It is not the first time KQ is flirting with foreign expertise. McKinsey, a global consultancy firm, was paid Sh2.4 billion to give directions to KQ in 2015. The firm recommended KQ fire 600 employees, sell off or lease some of its aircrafts and dispose of its prime landing spot in London.

“The planes were leased to Oman Air at industry rates while KQ continued paying the inflated price it negotiated when it leased the planes. Nothing the consultants did or recommended ever worked. And they took home billions,” says a KQ former board director.

The turbulence at KQ has far-reaching ramifications for the Kenyan economy. Last year, for instance, Kenyan farmers suffered a 20 per cent shortfall in flower exports because KQ couldn’t deliver flowers before Valentine’s Day, when 40 per cent of all flower sales are recorded worldwide.

Kenya Flower Council (KFC) CEO, Clement Tulezi, stated in a previous interview that the industry has access to only 3,500 tonnes of freight capacity per week against a demand of 4,800 tonnes.

“We estimate that between 15 and 20 per cent of our flowers cannot be exported due to either high costs or lack of available cargo space. This has significantly impacted our export volumes,” he said. Kenya’s floriculture sector is worth an estimated US$1.1 billion and employs over 500,000 people.

How did we get here?

The Standard weaves together the complex, decades-long story of Kenya Airways, based on a review of thousands of pages of financial reports, parliamentary records, audit findings, and damning internal Board reports. From ambitious beginnings to a celebrated global partnership and lofty heights, KQ fell into a perennial loss-making business requiring repeated financial bailouts. So dire is the situation that last Christmas, staff were paid half of their December salaries.

The airline rose from the ashes of East African Airways, which collapsed in 1977 following the breakup of the East African Community. Needing a sovereign flag carrier, the Kenyan government established Kenya Airways on January 22, 1977. The new state-owned entity inherited a modest fleet, starting with two Boeing 707-321s leased from British Midland Airways on February 4, 1977, for the pivotal Nairobi-Frankfurt-London route. This was supplemented by a Douglas DC-9-52 and Fokker F27-200s for domestic services, marking a humble but hopeful beginning. For its first decade and a half, KQ operated as a typical government-run airline, slowly expanding its network within Africa and to European destinations. A pivotal shift began in the early 1990s under the executive chairmanship of Philip Ndegwa, appointed in 1991. Tasked with commercialising operations ahead of a historic privatisation, Ndegwa was supported by consultants from British Airways’ “Speedwing” division, who recommended crucial financial controls and IT upgrades.

The push gained momentum with the appointment of Brian Davies as Managing Director, who steered the airline to profit for the first time in its history in 1994.

In January 1996, KLM Royal Dutch Airlines acquired a 26 per cent strategic stake for $26 million, securing a board seat and deep commercial integration. The Government of Kenya retained 23 per cent, employees held 3 per cent, while the remaining 48 per cent was offered to the public in a March 1996 Initial Public Offering on the Nairobi Stock Exchange.

Although exact subscriber numbers remain undocumented, the IPO was wildly oversubscribed amid a wave of national optimism. Fleet growth accelerated, with Boeing 737s and 757s, extending KQ’s reach across Europe, the Middle East, and deeper into Africa by the decade’s end.

The KLM alliance, formalised between 1995 and 1996, was comprehensive. It integrated codeshares, frequent flyer programmes, and maintenance support, meticulously positioning KQ as ‘Africa’s Pride.’ KLM, holding its board seat, wielded significant influence over strategy. For years, analysts viewed it as a masterstroke, but a later, more critical consensus emerged. Many concluded the partnership was fundamentally lopsided, with KLM benefiting far more from reliable African feeder traffic into its lucrative European and global network than KQ gained from European access.

The partnership’s perceived golden age unfolded under CEO Titus Naikuni who was appointed in 2003. He drove aggressive growth, with landmark orders for Boeing 787 Dreamliners, 777-300ERs, and Embraer E-190s. The arrival of the first 777 in 2014 marked KQ as East Africa’s pioneering long-haul carrier, with destinations exceeding 60 cities. Profitability peaked between 2000 and 2010, but the seeds of trouble were sown within this very ambition, particularly through the debt-fueled “Project Mawingu” expansion plan.

Cracks began to show almost immediately after the peak. Post-2010, soaring fuel costs and intensifying competition squeezed margins. Kenya Airways posted its first major loss in the 2011-2012 financial year under Naikuni, a loss attributed to the high debt from the new fleet purchases, sharp currency depreciation, and persistently weak intra-African demand. This was the ominous prelude to the catastrophic Sh7.86 billion loss in 2014.

The CEO mantle passed to Peter Hartman, a former KLM executive, in 2015. His tenure was defined by managing the escalating strain — grounded planes, rising lease costs, and a rapidly deteriorating balance sheet. The crisis deepened under his successor, Sebastian Mikosz, the Polish CEO appointed in 2017.

Mikosz faced an almost insurmountable challenge, including massive legacy debts, operational crises that foreshadowed the global pandemic, and chronic maintenance woes. He resigned in December 2019, his costly tenure—with a pay package estimated at Sh450 million annually—seen by many as a failed experiment that a parliamentary committee would later term “a colossal waste of public funds”.

The task of navigating the abyss fell to Allan Kilavuka. He became Acting CEO in February 2020, with his substantive role beginning on April 1, 2020. Kilavuka inherited a Covid-ravaged industry. His first act was to slash salaries across the board, taking an 80 per cent cut himself as the airline grounded all but essential cargo and repatriation flights.

His six-year tenure was a relentless battle for survival: He slashed costs, renegotiated leases, restructured debts, and forged stronger alliances with partners like South African Airways. He navigated pandemic losses that included a US$100 million hemorrhage in the first half of 2021 alone, and managed a fleet where up to 33 per cent of aircraft were grounded due to a global scarcity of spare parts.

His tenure was a paradox of extremes. Under his watch, KQ posted its worst full-year loss in history — a staggering Sh38.26 billion in 2022. Yet, he also presided over a miraculous, fragile recovery: the airline reported its first full-year profit in 11 years in 2024, a Sh5.4 billion after-tax notch that seemed to signal a turning point. However, this hope was short-lived. In November 2025, KQ issued a profit warning, indicating earnings for the year to December 2025, eroded by grounded aircraft and reduced capacity, would drop by more than 25 per cent.

It is at this precarious juncture—with profitability elusive, aircraft grounded, and momentum in doubt—that the board has chosen a new captain to manage a contentious lease. Captain Kamal, whom the board has touted as a “tried and tested officer” steps into the hot seat with 27 years of global aviation expertise.

State rescue

These latest crises unfold against a historical backdrop of billions in state rescue. Since its descent into financial turbulence around 2016, Kenya Airways has relied on a lifeline of government bailouts with escalating urgency and scale, beginning with at least Sh35 billion in loans dispersed across 2016-2020 to steady operations amid mounting debts. In late February 2020, a critical Sh5 billion commercial loan infusion targeted engines, maintenance, and salaries as early Covid shadows loomed, followed swiftly by a Sh11 billion short-term loan later that year and a Sh14 billion package in 2021 to avert collapse.

The hemorrhaging continued into April 15, 2022, when the Treasury allocated an additional Sh36 billion for restructuring, overlapping with a FY 2022/23 commitment of Sh36.6 billion explicitly for reorganisation efforts. By December 2022, another Sh34.9 billion—later trimmed by Sh10 billion to Sh24.9 billion—was pumped in to settle crippling lessor arrears, pushing the documented cumulative support beyond Sh98 billion.

These piecemeal rescues, often announced with fanfare but lacking precise wire dates in public records, underscore a decade-long pattern of phased shareholder loans and debt assumptions that have kept the Pride of Africa aloft, though critics decry the absence of ironclad recovery timelines.

Today, Kenya Airways stands at its most critical crossroads in years. It is led by a foreign CEO appointed by an incomplete board, poised to sign a lease that defies market logic, and striving to sustain a profitability that vanished as quickly as it appeared. Does this new chapter represent a renewal or a deepened capitulation to the very forces of opacity and financial recklessness that have long plagued the carrier?

This pattern, which economists like Samuel Nyandemo have criticised as supporting “money-losing companies,” exists alongside persistent allegations of profiteering that parliamentary committees have investigated. MPs in 2025 decried “cartel-controlled leasing” as a “financial black hole,” a description that now seems prophetic in light of the Avalon terms.