National carrier Kenya Airways (KQ) owed the Kenya Civil Aviation Authority (KCAA) Sh1.5billion in unpaid service fees as at the end of the financial year to June 2025, which is more than half the cumulative debt to the regulator by airlines, new disclosures show.

The latest disclosures by the regulator show that it was owed Sh2.3 billion in unpaid fees by different air operators, of which KQ’s debt accounts for 65 percent. The national carrier also accounts for nearly 90 percent of the amount owed by domestic operators, making it a significant credit risk for KCAA.

KCAA said that part of KQ's debt has been outstanding for more than two years, and it has been engaging the airline to recover the unpaid fees.

“The Authority has significant concentration of credit risk on amounts due from Kenya Airways plc… The Authority has continued to engage Kenya Airways to settle the outstanding debt,” KCAA said in a disclosure.

In her audit of KCAA books for the period, Auditor-General Nancy Gathungu questioned the recoverability of the debt owed by KQ to the regulator, given the age and size of the outstanding balance.

“The recoverability of the long outstanding balance is doubtful,” said Ms Gathungu.

The unpaid fees include charges for renewal of air operator certificates, aircraft registration and certification, flight operations and airworthiness oversight, passenger-related charges, as well as other regulatory fees relating to pilots, engineers and aircraft operations.

The size of the arrears leaves KCAA with significant exposure to KQ's financial challenges, raising questions over how the regulator will recover the money as KQ continues with efforts to strengthen its balance sheet.

KQ’s debt and payables have been increasing amid mounting cash flow challenges, with revenue affected by constrained capacity due to grounded aircraft caused by a global shortage of airline parts.

In the year to December 2025, its current liabilities grew by about Sh10 billion to Sh62.6 billion, including Sh29.4 billion in accrued expenses, which rose from Sh24.8 billion the previous year.

Mary Mwenga, KQ’s Chief Financial Officer, said the carrier has already crafted a plan to clear the outstanding debt to the regulator. She did not give timelines for the payment plan.

“We have strong and continuous, constant engagement with KCAA, and as far as I’m concerned, we’ve honoured those payment plans, and we’re good with KCAA,” Ms Mwenga said.

The airline has been seeking fresh capital to support its turnaround and strengthen its balance sheet, with the government looking to bring in a strategic investor. The government is separately moving to clean up KQ’s balance sheet ahead of the planned investment.

Roads and Transport Cabinet Secretary Davies Chirchir last month said the government had “written off” all of KQ’s historical debt, although he did not clarify whether the debt would include the Sh1.5 billion owed to KCAA.

The debt write-off is part of the government's efforts to make the national carrier more attractive to investors, who are expected to inject capital into the airline and support its return to profitability.

vogweno@ke.nationmedia.com