Kenya Airways in Crisis: Soaring Fuel Costs Force Sweeping Contract Review Amid Middle East Turmoil

East Africa's flagship airline, Kenya Airways, is facing mounting financial pressure after fuel costs jumped 72 percent in the first half of 2026, with fuel now accounting for nearly half of its operating expenses.

The increase has forced the airline to launch a broad review of its spending, including what Acting Group Managing Director and CEO Captain George Kamal described as a review of “every single contract” across the business.

Kamal told journalists in Nairobi that the conflict in the Middle East had “heavily impacted” the airline. The effects have extended beyond fuel prices, with disruptions to global supply chains delaying aircraft spare parts and lengthening maintenance periods.

Those delays have reduced the number of aircraft available for service at a time when Kenya Airways is working to restore its full fleet capacity by the end of the year.

Fuel Costs Put Kenya Airways Under Pressure

The airline's exposure to rising fuel prices has become particularly significant because of its limited hedging capacity. After remaining relatively stable earlier in 2026, benchmark crude oil prices rose to about $85 per barrel by mid-July as renewed conflict in the Middle East unsettled energy markets.

For Kenya Airways, higher oil prices feed directly into its operating costs, leaving less room to absorb sudden increases than larger airlines with more extensive fuel-hedging programmes.

The pressure also comes as the carrier continues its recovery efforts. Kenya Airways has been working to strengthen its financial position while rebuilding its fleet and network, making the latest increase in operating costs an unwelcome setback.

The airline is an important link between African destinations and markets in Europe, Asia, the Middle East and the Americas, with Nairobi's Jomo Kenyatta International Airport serving as its main hub.

A prolonged increase in fuel costs could therefore have consequences beyond the airline itself. Higher operating expenses can put pressure on fares, particularly on long-haul routes where fuel represents a substantial share of total costs.

Airline Is Also Seeking Fresh Capital

Kenya Airways is pursuing longer-term measures alongside the immediate cost-cutting exercise.

The carrier is seeking to raise at least $500 million in fresh capital to support fleet expansion and modernization. It is also considering the sale of a 49 percent stake to a strategic investor as it looks for additional financial backing.

The airline has also been pursuing sustainability initiatives. It previously operated what it described as Africa's first commercial flight partially powered by locally produced sustainable aviation fuel, highlighting its efforts to reduce the environmental impact of its operations.

These plans now have to be pursued against a more difficult financial backdrop, with fuel prices, aircraft availability and supply-chain disruptions all affecting the airline's ability to control costs.

What the Crisis Means for African Aviation

Kenya Airways' situation reflects a broader challenge for African airlines, many of which have less financial capacity than their larger international competitors to absorb sudden increases in fuel and operating costs.

The continent's carriers remain particularly exposed to global oil prices because aviation fuel represents one of their largest expenses. Supply-chain disruptions can add another layer of pressure when airlines struggle to obtain aircraft components or complete maintenance on schedule.

For Kenya Airways, the immediate priority is to contain costs while keeping as much of its network operating as possible. The airline's contract review is therefore not simply an administrative exercise; it is part of a wider attempt to protect its finances while continuing its recovery.

If high fuel prices persist, African carriers could face difficult choices over routes, fleet expansion and ticket pricing. Kenya Airways' experience could serve as an early indication of the pressures the region's aviation industry may encounter as geopolitical instability continues to affect global energy and supply chains.