KAA profit halves as revenues, passenger charges slump

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The Kenya Airports Authority (KAA) posted a 41 percent profit dip to Sh3.8 billion in the financial year to June 2025, largely driven by a drop in revenues, surging costs and easing of foreign exchange gains.

New disclosures show that the airports operator’s revenues for the year declined by about Sh1.1 billion, with forex gains dropping by more than 10-fold, while its costs rose by Sh1.5 billion, putting pressure on its net earnings, which declined by Sh2.7 billion, from Sh6.5 billion in the year to June 2024.

This marked the second consecutive year of profit-making for the state corporation, after emerging from a Sh4.2 billion net loss in 2023, when it was forced to pay billions of shillings in compensation to Chinese contractors for a botched tender to construct a second terminal at Jomo Kenyatta International Airport (JKIA) in Nairobi.

The latest profit will go to the corporation’s retained earnings, supporting investments in airport resources across the country, including the ongoing upgrades of JKIA, the authority said.

“While lower, this result reflects a cleaner, more sustainable earnings base, one less reliant on exceptional items and more aligned with core operational performance,” said KAA Acting Managing at the time Mohamud Gedi.

“Our financial health is not measured by a single year’s profit, but by our ability to deliver consistent, reliable service to the nation year after year.”

During the year, nearly all sources of revenue for the airport operator declined, signalling reduced aircraft activity and increased share of smaller and domestic planes in aircraft movement.

Money earned from the Airport Passenger Service Charge, for instance, reduced to Sh10.5 billion from Sh10.8 billion a year earlier, while airplane landing and parking fees fell to Sh4.5 billion from Sh5 billion.

Overall, revenue from aeronautical services dipped by roughly Sh1 billion to Sh15.6 billion from Sh16.6 billion the previous year.

Non-aeronautical revenue, which includes rental income for office spaces and desks at airports, concessions and fees for security passes for aviation employees, also declined slightly, from Sh21.9 billion to Sh20.8 billion.

Another significant income fall was in foreign exchange gains, which dipped by 96 percent to Sh18 million, down from Sh602 million in the year to June 2024.

The local currency appreciated significantly against the American dollar between January and June 2024, handing the state agency a gain in forex.

Compounding the impact of the revenue decrease was a surge in costs, driven largely by a rise in provision for bad debts, up from Sh1.4 billion to Sh2.2 billion.

Its total costs rose from Sh15.5 billion to Sh17.1 billion.

The airport operator is now banking on increased revenues, especially from the Air Passenger Service Charge Fund (APSCF), its single largest income source, to finance new airport developments.

The new terminal construction at JKIA is specifically expected to draw from the kitty, which will finance up to 30 percent of development costs, with the remaining percentage expected to come from a syndicated loan arranged by the Trade and Development Bank and the African Finance Corporation.

Reporting originally appeared via Business Daily. Read the full source for additional context.