Why is East Africa building new airports while national airlines struggle?

Governments across East Africa are investing heavily in East African aviation infrastructure.

This push for multi-billion-dollar airport projects continues. It happens even as national carriers face significant financial challenges. The strategy creates a notable split in regional aviation priorities.

Kenya's Airport Overhaul

Kenya is moving forward with a major airport overhaul. The government plans to modernize and expand Jomo Kenyatta International Airport (JKIA). JKIA currently handles over 8 million passengers annually. This traffic exceeds its original design capacity of 7.5 million.

President William Ruto announced plans to begin construction in 2026. The goal is to build a new world-class airport. This project aims to anchor Kenya as the region's aviation hub.

This new plan follows a canceled deal. The government scrapped a previous $1.8 billion expansion contract. This contract was originally awarded to the Adani Group in 2024. The state is now exploring alternative airport funding. Reports indicate the sovereign wealth fund may finance the project. The estimated cost for the new airport is approximately $2.043 billion (Ksh264 billion).

Regional Infrastructure Ambitions

Kenya is not alone in its infrastructure drive. Ethiopia is constructing the $12.5 billion Bishoftu International Airport. This new facility is set to become Africa's largest. Analysts suggest this project is economically justified. This is due to the financial strength of Ethiopian Airlines.

This contrasts sharply with other national carriers. The region's focus on airport expansion raises questions. Critics argue that governments should first stabilize their struggling national airlines.

The Airline Profitability Crisis

African airline profitability remains the lowest worldwide. The International Air Transport Association (IATA) forecasts a combined net profit of only $200 million for African carriers in 2026. This represents a thin 1.3% net margin. This translates to a mere $1.30 profit per passenger. The global average is $7.90 per passenger.

Structural barriers continue to constrain growth. These include high fuel costs and elevated taxes. Blocked airline funds are also a major issue. IATA estimates $954 million in airline funds are trapped across African countries.

Kenya Airways Financial Struggles

Kenya Airways financial struggles highlight this conflict. The national flag carrier returned to losses in 2025. This followed a brief profit rebound in 2024. The airline reported a net loss of KSh 12.17 billion (about $94 million USD) in the first half of 2025.

The primary cause was operational disruption. Global supply chain issues grounded three of its nine Boeing 787-8 Dreamliner aircraft. This shortage of spare parts and engine availability cut capacity by up to 20%. The capacity loss cost the airline an estimated KES 12.6 billion in lost revenue. The airline plans to raise $500 million by early 2026. This capital raise is intended to strengthen its fleet and financial position.

Industry Impact and Outlook

The dual focus on infrastructure and struggling airlines presents a risk. New airports need anchor carriers to justify the massive investment. Without strong national airlines, new hubs may fail to reach their potential.

• Risk: High airport charges may be needed to fund new infrastructure, further burdening already-struggling airlines.
• Opportunity: Modernized airports like JKIA are essential for East Africa air travel growth. They can support regional trade and tourism.
• Challenge: The IATA 2026 industry outlook stresses that traffic growth alone is insufficient. Structural financial barriers must be addressed for true financial strength.

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