Kenya Airways - Afrikan Heroes

Defying The Odds, Kenya Airways Is Optimistic About 2022 Revenues

February 19, 2022

As more countries ease their travel restrictions, airlines are eyeing 2022 as a year for recovery. Kenya Airways is once such carrier, with the Nairobi-based operator projecting a notable rise in passenger revenues this year. The airline is hoping for a busy summer despite the uncertainty of an upcoming election.

Kenya Airways’ Chief Executive Officer, Allan Kilavuka is quite optimistic about revenues, according to him, the airline’s worst days in the coronavirus pandemic are likely behind it. He stated that “we have been through the worst patch,” with this likely referring to the early months of the crisis. Indeed, Reuters notes that, during 2020, revenues at the Kenyan flag carrier halved. Since then, it has been on the comeback trail.

While 2020 was the most challenging year for Kenya Airways during the present pandemic, it still faced challenges in 2021. Despite a 21% growth in passenger revenue last year, which narrowed its losses by a fifth, the national airline also lost 11.5 billion Kenyan Shillings ($101 million) in the first six months of 2021.

Moving into 2022, Kilavuka foresees calmer skies for Africa’s only SkyTeam alliance member. He explained to Reuters that he expects passenger revenues to rise by a further 20% this year. This will help establish a consistent recovery path away from the chaos of 2020. However, the projection is dependent on certain factors.

One of the primary areas of financial concern for airlines amid the present crisis has been the difficulty in adapting to ever-changing travel restrictions. With these regulations liable to sudden changes, it can be hard for airlines to make economic plans with much certainty. Equally, it can take time to respond to positive changes.

With this in mind, Reuters notes that a consistent market will play a key role in enabling Kenya Airways’ positive revenue projections. Indeed, its CEO told the agency that the forecast “is dependent on no further travel disruption or restrictions caused by any new coronavirus variants.” This, of course, remains to be seen.

For the country of Kenya itself, there is also the small matter of a general election to contend with this year, on August 9th. Kilavuka hopes that the election will be a peaceful occasion, given that the peak summer season has seen ‘promising’ booking levels. However, violence has marred two of the country’s last three elections.

As it looks to recover from the impacts of the early months and year of the ongoing coronavirus pandemic, Kenya Airways’ longer-term aspirations include a return to profitability. With this in mind, it has commissioned a report from Seabury, a consulting group. Kilavuka explains that, ultimately:

“We are looking for a more efficient airline. The network should not lose money.”

This may lead to cuts in certain areas, with the CEO telling Reuters This may lead to cuts in certain areas, with the CEO telling Reuters that the carrier will take “a critical look at staffing and the renegotiation of contracts with suppliers and plane leasing firms.” It will be interesting to see what comes of these efforts, and how successful Kenya Airways profitability plans will prove to be.

This may lead to cuts in certain areas, with the CEO telling Reuters that the carrier will take “a critical look at staffing and the renegotiation of contracts with suppliers and plane leasing firms.” It will be interesting to see what comes of these efforts, and how successful Kenya Airways profitability plans will prove to be.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

British Airways Announces New Codeshare With Kenya Airways

October 29, 2021

British Airways (BA) and Kenya Airways have signed a codeshare agreement in a move designed to boost business travel and tourism between African destinations and Europe. In a statement released on October 21, 2021, the flagship carrier of the United Kingdom said that thanks to the new codeshare with Kenya Airways, BA customers can seamlessly connect on Kenya Airways flights within Africa.Based at Jomo Kenyatta International Airport (NBO) in the Kenyan capital Nairobi, British Airways customers can now connect to 20 destinations in East and Central Africa. The Kenya Airways destinations list includes Douala, Zanzibar, Lusaka, Mombasa, Addis Ababa, and Entebbe. British Airways customers can also take advantage of Kenya Airways flights to the Indian Ocean tourist destinations of Mauritius and the Seychelles.In the mutually benefitting codeshare, Kenya Airways customers can effortlessly transfer from British Airways London Heathrow Airport (LHR) hub to 26 destinations within Europe. BA European destinations from Heathrow include flights to Glasgow, Madrid, Milan, Amsterdam, Frankfurt, and holiday destinations around the Mediterranean Sea.Currently, British Airways flies from London to Nairobi four days a week on Tuesdays, Thursdays, Saturdays, and Sundays, with a three-class configured Boeing 777-200. Kenya Airways offers five flights a week between Nairobi and London every day except Wednesdays and Fridays. On the route, Kenya Airways has deployed one of its nine flagship Boeing 787-8 Dreamliners.

When speaking about the new codeshare in the British Airways statement, British Airways Head of Alliances Christopher Fordyce said: “After a difficult 20 months with global travel restrictions, it’s fantastic to see travel between the UK and Africa resuming. We are really pleased to be able to offer our customers access to even more destinations across the region thanks to our new codeshare agreement with Kenya Airways, making that bucket list trip even easier to plan.”In another statement, Chief Commercial and Customer Officer at Kenya Airways, Julius Thairu said:“The codeshare agreement with British Airways to provide our travelers with a seamless journey to and from Europe and Africa is very strategic. It will increase choices for thousands of passengers and will allow for smooth connectivity to a significant number of new destinations – particularly throughout Africa and Europe. By harnessing our complementary strengths, it will also provide benefits to aid the recovery of international travel and meet the increasing demand.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Covid-19 Induced Loss Hits Harder on Kenya Airways

March 25, 2021

Kenya Airways has announced what market watchers described as its worst results in memorable history as the airline continues to take stock of the full impact of the Covid-19 pandemic on its operations and businesses. This has triggered new talks of nationalization as the management rues the historic loss of over $330 million for the fiscal year of 2020 due to passenger numbers dropping by close to two-thirds, and the share loss jumped by as much. Meanwhile, a secret $91 million government bailout is waiting in the wings.

Apart from the rare exception, air operator financial results coming in for the full fiscal year of 2020 are severely in the red. Many account for historical losses. Forty-four-year-old Kenya Airways announced today that its pretax losses for 2020 amounted to 36.57 billion shillings ($333.2 million) – close to triple the sum from the previous year.

According to The Star Kenya, the airline’s Chief Executive Officer Allan Kilavuka said that passenger numbers dropped from 5.2 million in 2019 to 1.8 million during the year currently under review. Kenya Airways’ Chairman, Michael Joseph, was quoted as saying that things are bound to remain dire for the near future. “The COVID-19 global outbreak in 2020 was beyond anyone’s prediction, and its impact on the industry is expected to continue affecting air travel demand for the next two to three years,” Mr Joseph said.

Kenya Airways’ passenger numbers dropped from 5.2 to 1.8 million year-on-year. In December, KQ and Air France-KLM announced that they would be terminating their joint venture. Already suspended due to the ongoing crisis, the agreement will now officially end on September 1st this year. The Group still owns 7.8% of Kenya Airways. The remainder of the airline is divided, with 48.9% belonging to the Kenyan government, 38.1% to the KQ Lenders Company, and the rest to private shareholders.

Several voices have long called for the airline’s privatization, which the country’s Treasurer has also said it would favor as a long-term plan. However, in February, it was revealed that Kenya’s Treasury had approved a further Sh10 billion (approx. $91 million) in what Business Daily referred to as a ‘secret bailout’. The airline first sought state-aid (as a result of the COVID-19 crisis) in March last year, having halted all flights on March 22nd after orders from the government.

Even before COVID, the airline was struggling severely. With a loss of $258 million in 2106, the carrier came to the brink of bankruptcy due to a tremendous amount of debt, and lessors were threatening to repossess their aircraft. According to data from Planespotters.net, KQ only owns a few of its 39 aircraft outright – four Boeing 737s and seven of its nine 787 Dreamliners.

The SkyTeam alliance member also saw cargo volumes drop due to canceled flights leading to reduced belly space. Hoping to profit more from the airfreight demand growing due to such conditions, the airline, a little late on the ball compared to other ‘preighter’ operators, has converted one of its Boeing 787 Dreamliners to a temporary cargo-carrier.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Kenya Airways & Air France KLM Terminate Africa Europe Joint Venture Agreement

December 20, 2020

Kenya Airways and Air France KLM Group announced yesterday that they have agreed to mutually terminate their Africa-Europe joint venture partnership from 1st September 2021. According to a press release from Kenya Airways, the two airlines had previously suspended the Joint Venture cooperation for the calendar year 2020 mainly due to the COVID-19 pandemic and subsequent unpredictability of return to normalcy in operations.

According to Kenya Airways management, “Kenya Airways will continue to serve the Europe market through its gateways of London, Paris, Amsterdam with Rome slated for resumption from 2021. These routes will be served by onward codeshares from the Air France KLM group and additionally with our ever-expanding network of European carriers including Alitalia, British Airways, Lufthansa, and Swiss International Airlines amongst others.”

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry

Kenya Airways Protests Government’s Deal with Rival Ethiopian Airlines

April 15, 2020

Kenya Airways chief executive officer Allan Kilavuka

The management and staff of Kenya Airways are protesting a business deal entered into between the Kenyan government and rival Ethiopian Airlines aimed at allowing the Ethiopian to operate passenger planes grounded by the coronavirus for shipment of cargo from the Jomo Kenyatta International Airport ( JKIA) in Nairobi to Europe and Asia.

The loss-making Kenya Airways has said the new deal will give the rival carrier undue advantage in a period when Kenya has frozen international passenger travel in the wake of the coronavirus outbreak, leaving cargo as the only revenue driver.

On April 6, the Ministry of Transport allowed Ethiopian Airlines to vary its licence for passenger planes and use six aircraft to ferry cargo from Nairobi and Mombasa to overseas at a time when carriers are charging a premium for the service.

Kenya Airways is worried that Ethiopian Airlines will take a huge chunk of the business of shipping flowers, fresh fruits, vegetables like green beans and peas as well as meat that have become increasingly scarce in Europe as the coronavirus pandemic hampers the global movement of produce.

Kenya Airways chief executive officer Allan Kilavuka said the carrier was not consulted on the impact that the Ethiopian Airlines deal would have on its business

The national carrier is banking on the cargo business, which generates about Sh11 billion annually, to pay salaries and utilities like security, water and electricity.

“We have objected the move to have Ethiopian Airlines use their passenger flights for cargo business in Kenya because we were not consulted on the impact that this would have on our business,” said Mr Kilavuka was quoted as saying.

Mr Kilavuka was of the view that Kenya Airways should have been consulted before varying Ethiopian Airlines licences, arguing that JKIA is the hub of the national carrier.

“Anytime you have a carrier wanting to come to your domain, you need to be consulted so that you are not disadvantaged at your main market,” he said.

The State suspended all cross-border passenger flights on March 22, stopping the airline’s foreign flights. The order effectively cut off Kenya Airways’ flow of new revenues at a time when it had no cash reserves.

Last Monday, the government also barred movement into and out of four counties including Nairobi, Mombasa, Kwale and Kilifi, forcing Kenya Airways to ground flights and hinge its survival solely on cargo business.

So far, the loss-making Kenya Airways has sought a multibillion-shilling government bailout after the grounding of its planes.

Without State aid, the airline risks running out of money in the near future against the back- ground of banks’ uneasiness in lending to Africa carriers.

KQ has now warned that the Ethiopian Airlines deal will worsen its cash flow.

Kenya on April 6 allowed the profitable Ethiopian Airlines to modify six passenger planes for shipment of cargo from Nairobi and Mombasa.

“Reference is made to your letter… this is to advise you that approval is granted to Ethiopian Airlines to operate as cargo flights from April 3 to October 25,” says a letter signed by Director of Air Services, Nicholas Bodo.

The carrier has already received permission from the aviation regulator, the Kenya Civil Aviation Authority (KCAA), to start operating the cargo service. Most cargo airlines have pulled out of the Nairobi route following the outbreak of coronavirus across the world.

The withdrawal has created a gap for cargo transport despite high volumes of freight needed for the European market where Kenya sells over 80 percent of horticulture produce.

Ethiopian Airlines has maintained restricted passenger services. The planes flying cargo from JKIA are charging more, encouraging the likes of Ethiopia Airlines to seek a larger piece of the market.

Operators have tripled the price per kilo of produce to $3 in the two weeks to end of March, according Hosea Machuki, head of the Fresh Produce Exporters Association of Kenya, which represents 117 growers and exporters.

While governments from Kenya to South Africa are struggling to turn around loss-making State-owned airlines through restructuring or by bringing on board private partners, Ethiopian Airlines has bucked the trend.

It posted operating revenue of $3.9 billion (Sh395 billion) in its 2018/19 financial year, up from $3.3 billion (Sh334 billion) a year earlier. Its net profit also rose to $260 million (Sh26.3 billion) from $207.2 million (Sh21 billion) from its 143 destinations where it carried 12.14 million passengers.

In contrast, Kenya Airways reported revenue of Sh114.45 billion for the year to December 2018, up from Sh106.17 billion a year earlier. It narrowed its pretax loss to Sh7.59 billion from Sh9.44 billion in a year it carried 4.84 million passengers in 54 destinations.

Kenya Airways problems have been linked to a mix of increased competition, corruption, mismanagement and a previous debt binge that continues to weigh heavily on its balance sheet.

Kelechi Deca

Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry