Kenya Airways (NSE: KQ) and Rubis Energy Kenya have signed a Memorandum of Understanding (MOU) to develop a sustainable aviation fuel (SAF) refinery in Nairobi, a project the companies said would be Africa’s first dedicated SAF facility. The companies announced the agreement on 12 May 2026 in Nairobi, saying the facility will be sited near Jomo Kenyatta International Airport (JKIA) to connect production with existing fuel infrastructure and airline demand.

In a joint statement, the partners said the MOU sets the framework for “joint engineering, financing, and operation” of a facility designed to produce lower-carbon aviation fuel using local waste feedstocks. The signing was witnessed by President William Ruto and French President Emmanuel Macron during the Africa Forward Summit, according to the news release.

The project will use Dragonfly’s modular refinery technology to process feedstocks including used cooking oils, waste animal fats and other vegetable oils, the companies said. The planned facility is expected to have a production capacity of 32,000 tonnes and requires an estimated investment of about KES 8.4–9.8 billion (€60–70 million), based on figures provided in the release.

The announcement comes as airlines and fuel suppliers globally face increasing regulatory and investor pressure to cut emissions, with SAF widely viewed as an important near- to medium-term option for reducing aviation’s carbon footprint. For Kenya, a local SAF supply chain would also touch multiple sectors, including waste collection and processing, logistics, manufacturing, and airport fuel distribution.

Kenya Airways Acting Group Managing Director and CEO George Kamal linked the project to aviation decarbonisation and current fuel consumption at JKIA. “The expansion of air transport is linked to a growing share of global greenhouse gas emissions. Currently, Jomo Kenyatta International Airport consumes 2.9 million litres of jet fuel every day, an amount equal to filling the tanks of 52,727 family cars,” Kamal said.

Kamal said the airline currently relies on imported jet fuel and framed the proposed refinery as a way to produce an alternative locally. “While we currently depend entirely on imports, this refinery allows us to produce a sustainable, local version of that fuel,” he said, adding that SAF would support the International Civil Aviation Organization (ICAO) net-zero CO₂e emissions target by 2050.

Rubis and Dragonfly said the project will include skills development and a target timeline for commissioning. Jean-Christian Bergeron, Co-Managing Partner of Rubis and CEO of Rubis Énergie, said, “Our priority will be technology transfer and ensuring that training is provided for local skills development so that the facility, and associated supply chains, will be operated and managed by Kenyans.”

Dragonfly intends to bring the facility online within 24 months, according to the release. Karl W. Feilder, CEO of Dragonfly, said, “The critical advantage of this project is that a Dragonfly refinery can be sited close to both the feedstock and the consumers of the fuel, and utilise the existing Rubis infrastructure to provide a long-term daily supply of SAF to Kenya Airways at Jomo Kenyatta International Airport.”

If executed, the refinery could position Nairobi as an early SAF production hub in East Africa, with implications for airline operating costs, supply security, and the development of a formal market for waste oils and fats. However, key details—such as final investment decision timing, project ownership structure, feedstock supply contracts, pricing, and regulatory approvals—were not disclosed in the statement.

The partners said the MOU provides the basis for engineering and financing work to proceed. The next milestones will include detailed project development, securing funding, and concluding arrangements for feedstock supply and offtake, as the proponents work toward the 24-month commissioning target cited by Dragonfly.

Kenya Airways has partnered with Trace as the official airline partner for “Africa Forward — Le Concert,” a cultural event linked to the Africa-France Summit programme set for May 12, 2026 at the Kasarani Indoor Arena in Nairobi, according to a press release dated May 11, 2026.

The airline said the arrangement will see it support travel logistics for “hundreds of accredited travelers,” including artists, management teams and production staff arriving in Nairobi from multiple African and European cities. The event is being held under the patronage of President William Samoei Ruto and French President Emmanuel Macron, the organisers said.

The concert’s line-up includes African and French diaspora artists such as Yemi Alade, Fally Ipupa, Youssou N’Dour and Abigail Chams, among others, according to the statement.

The partnership places Kenya Airways at the centre of a high-profile summit-linked programme that blends diplomacy, culture and international travel flows. For Kenya’s aviation and hospitality ecosystem, summit-related events typically increase demand for flights, accommodation, ground transport, event production services and security, while also serving as a showcase for Nairobi as a meetings, incentives, conferences and exhibitions (MICE) destination.

Captain George Kamal, Ag. Managing Director and Chief Executive Officer at Kenya Airways, said the airline views the arrangement as part of its role in facilitating cross-border movement tied to major moments on the continent. “At Kenya Airways, we believe that travel is about more than moving from one destination to another but rather about enabling the moments that bring people, culture, and opportunity together,” Kamal said. “Africa Forward — Le Concert is one of those defining moments, and we are proud to play our part in welcoming Africa and the world to Nairobi and reinforcing our broader commitment to customer value and innovation.”

Olivier Laouchez, Executive Chairman at Trace, said the partnership is intended to support delivery of the event across audiences. “Trace and our Kenyan partners are proud to produce Africa Forward to place African creativity at the centre of a global conversation,” Laouchez said. “Partnering with Kenya Airways allows us to deliver that vision with the care and the connectivity this moment deserves and inspire audiences at scale.”

Organisers said the partnership will also extend to Trace’s “Futuristic Outfit Competition,” where two winners will receive complimentary return air tickets. The press release did not disclose the value of the tickets or routes covered.

In audience estimates provided by the organisers, Africa Forward — Le Concert is expected to host 4,500 VIP guests at the venue and reach an estimated 500 million viewers globally through Trace television channels and digital platforms, as well as TV5 Monde, YouTube, TikTok and African national TV networks. The press release did not provide an independent methodology for the viewership estimate.

For Kenya Airways, the deal highlights the commercial and brand value of strategic partnerships tied to large international gatherings, which can generate incremental passenger traffic while reinforcing Nairobi’s status as a regional hub. For Trace and other media platforms, Nairobi-based productions offer a route to pan-African distribution and advertiser interest aligned to music, fashion and youth culture audiences.

The next milestone will be the staging of the concert on May 12, 2026, alongside associated travel movements into Nairobi and broadcast distribution across partner networks and digital platforms, as outlined in the press release.

Kenya Airways said global aviation supply-chain disruptions and aircraft maintenance constraints significantly impacted its full-year performance for the period ended 31 December 2025, even as demand for travel remained firm and the airline pursued capacity recovery and diversification.

During the results announcement, Kenya Airways Chairman Kiprono Kittony said the carrier’s performance should be viewed against an industry backdrop of “unprecedented operational constraints”, including supply-chain delays and reduced aircraft availability, rather than a collapse in passenger demand.

“While our financial performance reflects a challenging year, it is important to recognise that this was driven primarily by global supply chain disruptions and not a lack of demand. The appetite for travel remains strong, and the strategic relevance of Kenya Airways has never been more evident,” Kittony said.

Maintenance, groundings and operating shocks

According to a results backgrounder shared with media, Kenya Airways said maintenance and grounded aircraft were the main drag on 2025 performance, with additional cost pressures stemming from engine shortages, bird-strike damage in Nairobi, longer routings due to airspace closures, and higher fuel burn on rerouted flights to Europe.

The airline estimated that bird strikes have, over roughly seven years, resulted in at least eight engines being on the ground at one point and two engines becoming “beyond economic repair,” according to the backgrounder.

Management also noted that passenger operations remain low-margin, describing passenger unit contribution as “very thin,” which increases the financial impact of disruptions. The airline cited further constraints including supply-chain delays for parts, a global shortage of maintenance, repair and overhaul (MRO) capacity, and the cost of keeping aircraft and employees on the ground while awaiting engines, repairs or scheduled maintenance.

Kenya Airways also pointed to operational constraints at Jomo Kenyatta International Airport (JKIA), including baggage and processing bottlenecks, and to regulatory and tax conditions that, it said, leave African carriers structurally disadvantaged compared with better-supported competitors.

Stabilisation strategy and engineering capability

Kenya Airways said it is entering a second phase of its turnaround centred on stabilisation, capacity recovery and diversification. The airline’s immediate priorities include restoring aircraft availability, protecting cash and reducing the cost burden of an ageing fleet entering heavy maintenance cycles.

Management said several aircraft have been released back to service, with more undergoing A-checks and C-checks between January and June in order to return in time for the June-to-October peak season.

The airline highlighted what it described as its first in-house heavy check on a Boeing 787 as a milestone for its engineering capability. It also said it has regained unrestricted EASA Part 145 certification, including approval for the Boeing 777, which it said strengthens its ability to serve other carriers.

Cargo expansion and market-share targets

Cargo is becoming a larger part of the business model, with management positioning it as a growth engine alongside passenger operations. Kenya Airways said thin passenger margins—estimated at US$1.30–US$1.40 per seat (about KES 168–181, using an indicative rate of KES 129 per US dollar)—make cargo and belly-hold capacity important for resilience.

The airline said it has expanded cargo capacity from 70 tonnes daily (across four 737 freighters) to 180 tonnes, and is targeting a larger share of the market. Kenya Airways said it is handling 28% of Kenya’s cargo market and cited a recent capacity purchase agreement involving a Boeing 747 freighter that moved nearly 100 tonnes inbound from Sharjah and dispatched over 110 tonnes of perishables outbound to the UAE.

Looking ahead, Kenya Airways said two additional 777 freighters, each with 100 tonnes capacity, are planned—one in four months and another by November 2026—targeting over 40% Kenyan market share and 15% African share, subject to partnerships and operating conditions outlined in the backgrounder.

Why it matters for Kenya

The airline argued that its performance and capacity have outsized implications for exporters, tourism, and Nairobi’s position as a regional hub. The backgrounder stated that aviation and tourism drive 40% of Kenya’s services exports, contribute US$3.3 billion to GDP (about KES 426 billion), and support 21,000 direct jobs plus 500,000 indirect jobs. It also said Kenya Airways carries 5.2 million of JKIA’s roughly 9 million annual passengers, or about 60% of total traffic.

For Kenya’s business landscape, the cargo push could support horticulture and other time-sensitive exports, while expanded maintenance capability could reduce reliance on foreign MRO capacity and create new revenue streams from third-party servicing. However, the airline’s outlook remains tied to global supply chains, fleet availability and airport infrastructure performance.

Outlook

Kenya Airways said the outlook is “cautiously positive,” contingent on continued improvement in maintenance recovery, supply-chain access and policy support. The airline expects more aircraft to return to service, stronger cargo contribution and improved unit economics as peak season demand comes through and heavy checks are completed ahead of the busy months.

Kenya Airways (KQ) has signed an interline agreement with South African regional carrier CemAir (5Z) to expand passenger connectivity into South Africa through Johannesburg (JNB) and Cape Town (CPT), the airline said in a media statement.

Under the agreement, Kenya Airways customers will be able to connect onto CemAir flights from Johannesburg to 10 domestic destinations in South Africa, including Bloemfontein, Hoedspruit and Kimberley. Kenya Airways also said the arrangement extends to four regional points served by CemAir, including Maun, Victoria Falls and Harare.

On the other side of the partnership, CemAir customers will be able to connect onto Kenya Airways flights to 15 destinations across Africa. Kenya Airways named Dar es Salaam, Addis Ababa, Entebbe, Accra and Abidjan among the destinations available for onward travel.

Kenya Airways said the interline agreement enables single-ticket itineraries and coordinated connections for customers travelling across the two airlines’ networks. The carrier did not disclose financial terms or implementation timelines for the arrangement.

The agreement is the latest example of airlines using commercial partnerships to widen network reach without adding aircraft capacity, a strategy that can be significant for carriers operating in Africa’s fragmented aviation market. For Kenya’s aviation sector, interline and codeshare-style arrangements can improve access to secondary cities and tourism markets that are not always viable for direct services from Nairobi.

Johannesburg and Cape Town are major gateways for business and leisure travel in Southern Africa, while routes linking East Africa with South Africa are important for trade, tourism and corporate travel flows. By tying into CemAir’s network from Johannesburg, Kenya Airways said it is positioning customers for onward access to smaller domestic markets in South Africa as well as select regional destinations in Southern Africa.

For CemAir, the tie-up offers a connection into Kenya Airways’ intra-Africa network, including hubs and commercial centres in East and West Africa, potentially increasing options for passengers who would otherwise rely on multiple tickets and self-managed transfers.

Kenya Airways did not provide passenger volume projections, expected revenue impact or details on baggage and ticketing conditions beyond the single-ticket and coordinated-connection framework described in the statement. CemAir also did not issue additional details within the provided statement.

Next, the practical impact for travellers will depend on how quickly the airlines integrate ticketing and schedules for sale through their respective distribution channels, and how consistently connections are timed through Johannesburg and Cape Town. Further updates are expected as the carriers operationalise the interline arrangement and make the eligible routes available for booking.