How do airlines make losses? Five ways Kenya Airways lose billions even with full flights

A full aircraft looks like a profitable aircraft.

It isn't necessarily.

Airlines operate on notoriously thin margins because the cost of putting a plane into the sky is enormous.

Kenya Airways' latest results offer a useful case study:

Revenue increased in the first half of 2026, but the airline still reported a deeper pre-tax loss than in the same period last year.

Here are five of the biggest costs that can turn busy flights into billion-shilling losses.

1. Jet fuel can swallow the ticket money

Fuel is usually one of an airline's biggest expenses, and Kenya Airways has just experienced how quickly that bill can explode.

KQ said its fuel costs jumped 72% in the first half of 2026, driven largely by the Middle East conflict and the resulting surge in oil and jet-fuel prices.

Fuel was consuming as much as half of the airline's total costs.

The problem is that airlines cannot simply pass every increase to passengers.

Raise fares too aggressively and travellers can switch airlines, postpone trips or choose cheaper routes.

The global industry is facing the same squeeze.

IATA estimates jet fuel could account for 31.4% of airline operating expenses in 2026, following the year's oil-price shock.

2. A grounded aircraft is still expensive

An aircraft earns money when it flies.

When it sits on the ground, much of its financial burden remains.

Airlines still face maintenance, leasing or financing, insurance and other ownership-related costs, while every grounded aircraft also represents seats that cannot be sold.

KQ has faced global shortages of aircraft parts and maintenance delays, affecting fleet availability.

That matters because fewer operational aircraft mean fewer seats available for sale and less revenue to spread across the airline's fixed costs.

3. A full plane doesn't mean every seat was profitable

Passengers don't all pay the same fare.

Someone who booked months ahead might pay far less than a traveller buying a last-minute business-class ticket.

Airlines therefore track yield, load factor and revenue per available seat kilometre, rather than simply counting passengers.

This explains why an aircraft can leave Nairobi almost full and still produce a disappointing financial return.

The industry itself illustrates the problem.

IATA expects airlines worldwide to fill about 84% of seats in 2026, yet projects a net margin of only 2% after the fuel shock.

4. The dollar value

Many major airline expenses are linked to the US dollar, including fuel, aircraft leasing and maintenance.

For a Kenyan carrier, that creates another layer of exposure.

Even when passenger numbers and ticket sales remain healthy, a weaker local currency or higher dollar-denominated costs can squeeze the bottom line.

An airline therefore has to manage not just passengers and aircraft, but also currencies, fuel markets and financing.

5. Flying involves far more than fuel

Every passenger flight carries a long list of expenses:

Pilots and cabin crew, engineers, airport and navigation charges, ground handling, catering, baggage systems, maintenance, insurance, technology and aircraft financing.

Then come the unexpected costs - aircraft disruptions, cancelled flights, spare-parts shortages and route changes.

That is why revenue growth does not automatically mean profit growth.

KQ's 2026 numbers make the point clearly: the airline generated more revenue but still ended the half-year with a Sh15.92 billion pre-tax loss, compared with Sh12.17 billion in the first half of 2025.

Airlines can be busy and still lose money

The contradiction is easier to understand when the whole business is viewed as a numbers game.

An airline needs to sell enough seats at the right fares to cover the cost of operating its fleet.

A fuel spike, grounded aircraft, expensive maintenance bill or currency shock can wipe out the margin that remains.

And airlines globally aren't operating with huge cushions.

IATA expects the world's carriers to generate about $23 billion in net profit on $1.165 trillion in revenue in 2026 - a margin of just 2%.

So when you see a Kenya Airways aircraft packed with passengers, the important question isn't simply “How full is the plane?”

It is:

How much did each passenger pay, and how much did it cost to get them there?