The airline industry is increasingly adopting digital transformation to enhance competitiveness, improve operational efficiency, and enrich customer experiences. This study investigated the effect of digital transformation initiatives on competitive advantage in the airline industry, focusing on Kenya Airways. Anchored on the Technology Acceptance Model (TAM), the research adopted a mixed-methods design with a census survey of 180 employees drawn from operations, customer service, information technology, marketing, and corporate affairs departments. Data were collected through structured questionnaires, validated through expert review and pilot testing, and analysed using descriptive statistics, Pearson correlation, and multiple regression. The results showed that digital transformation had the strongest and most significant influence on competitive advantage (r = 0.748, p < 0.01; β = 0.328, p < 0.001). Adoption of mobile and web platforms, automation of service delivery, AI/chatbots use, and digital engagement metrics were positively linked to operational efficiency, customer satisfaction, and brand positioning. The findings align with global evidence that digital tools transform customer engagement and efficiency in the aviation sector. The study concludes that digital transformation is a strategic lever for competitive positioning in Kenya’s aviation industry and recommends that Kenya Airways strengthen investments in automation, user-friendly platforms, staff digital training, and AI-powered solutions.