Analyst calls for Kenya Airways to be treated as strategic national asset, not profit-only firm

Public policy analyst Leonard Khafafa has called for Kenya Airways to be viewed as a strategic national asset rather than a purely profit-driven company, saying the airline has faced long-term underfunding despite its key role in supporting tourism, trade and jobs.

Speaking during an interview on Radio Generation on Thursday, Khafafa said African airlines continue to struggle with profitability due to high operating costs and global economic pressure, with fuel prices rising sharply in recent years because of geopolitical tensions.

He argued that the aviation sector requires heavy capital investment, noting that expectations placed on airlines to deliver strong profits are often unrealistic under current market conditions.

"Actually talking of Kenya Airways, it has been grossly underfunded over the years, because aviation is a very expensive business," he said.

Khafafa explained that early projections for African carriers showed very slim returns, with expected profits this year estimated at around one percent.

"When you translate it in terms of profit per passenger, it's about 1.3 US dollars profit per passenger. That comes to about 169 shillings per trip, per passenger," he said.

He added that the situation has worsened due to external shocks affecting fuel prices and overall operating costs in the sector.

"We've had the war in the Middle East and the price of fuel has gone up exponentially," he said.

According to him, the cost of Jet A-1 fuel, which powers commercial aircraft, has increased by about 70%, while fuel accounts for about 40% of total operating costs for airlines across Africa.

He said this has further reduced already narrow margins in the industry.

"So that 1.3 US dollars that we are talking about in terms of profit per passenger has actually been more than halved into something like 40 US cents per passenger," he added.

Khafafa noted that under such conditions, airlines are also exposed to additional financial pressure from delays and cancellations, including accommodation and compensation costs for affected passengers.

He maintained that airlines should not be judged purely on financial returns, but on their wider national value.

"You don't really look at an airline in terms of immediate returns or a balance sheet. You look at it in terms of strategic value that it provides for the country," he said.

He pointed out that Kenya Airways plays a broader economic role by supporting tourism growth, export activities and employment across related sectors.

"Kenya Airways is strategically valuable because it drives tourist numbers, it drives our export business," he said, adding that aviation and related industries support nearly half a million jobs and contribute between three and four percent of Kenya's GDP.

Khafafa further cited international examples where governments stepped in to support national carriers after the Covid-19 period, including Emirates, Singapore Airlines and major airlines in the United States, which received financial support in the form of grants rather than loans.

He said Kenya already has strong advantages, including skilled manpower, a growing tourism sector, its position as a regional business hub and its geographic location, but argued that limited capital investment remains a major barrier to fully unlocking the aviation sector’s potential.