SHARPLY REDUCED WEST AFRICA TRAFFIC WILL IMPACT ON KENYA AIRWAYS’ REVENUES
(Posted 15th October 2014)
Kenya Airways’ incoming CEO Mbuvi Ngunze has addressed the airline’s concerns over the impact of flight suspensions to destinations in West Africa, where an Ebola epidemic has since the original outbreak in Guinea now cost almost 5.000 lives spread over several countries.
While Nigeria, where Kenya Airways has flights to Lagos and Abjua and Senegal were able to contain their one off outbreaks, brought in by travelers from the affected countries, has traffic from and to West Africa generally taken a turn for the worse, aggravated of course by the suspension of flights to several destination like Monrovia and Freetown.
The airline sees as much as four billion in potential revenues lost during this financial year, which runs from 01st of April to the 31st of March. The situation for Kenya Airways has been aggravated by the downturn in tourism fortunes, as recently released figures by both the Kenya Tourism Board and the Kenya National Bureau of Statistics now formally confirm.
Kenya Airways was earlier this year confident that they can turn the page on the losses of the past two years but this latest challenge will no doubt make it only harder for them to return into profit territory.
On the upside will the move to the brand new Terminal 1A finally give the national airline the facilities and generous spaces they lacked in what was previously Unit 2, now Terminal 1C.
While not all flights have yet migrated to the new terminal building is this ongoing process nearing completion, giving Kenya Airways and the SkyTeam partners like KLM / Air France a new home, which, when fully functional, will provide both departure and arrival handling with separated traffic streams, allowing the American FAA to finally grant JKIA the much awaited Category 1 status. This seal of approval is a prerequisite to launch direct flights from Nairobi to the United States, seen as a key market for both tourism and trade.
A temporary lounge for Premier passengers will by the end of October make way for two brand new lounges, Pride and Simba which are also open for KQ’s alliance partners’ First and Business Class passengers.
To counter the downturn of fortunes in West Africa due to the Ebola factor, has Kenya Airways began to deploy their latest acquisition, the B787-8 Dreamliner, on regional route to for instance Entebbe, allowing them to showcase the comfort levels on board and by doing so tapping into the market for long haul flights to Europe, the Gulf and Asia where the B787 has fully substituted the formerly used B767’s. With Dreamliner number six’s arrival now just days away will more regional and continental routes be served by this aircraft type, giving travelers added reasons to fly with the Pride of Africa.
Add to that the options given to shippers of fresh produce, who can now use the substantial underfloor paletted cargo capacity to reach the consumer markets in Europe and the Gulf by being able to transship via Nairobi, which on the other aircraft used by Kenya Airways on the Entebbe route, the Embraer E190 and the B737-800NG is not possible.
With a 2x2x2 configuration in Business Class and a 3x3x3 configuration in Economy Class, both cabins are equipped with state of the art inflight entertainment systems, the larger windows, higher humidity levels and optimized pressurization will this aircraft type no doubt help to defend and regain market share for both outbound and inbound travel, halting the onslaught of the Gulf mega carriers and closest African rival Ethiopian.
Good news are no doubt needed at the Embakasi headoffice of KQ as the ongoing fleet renewal and expansion exercise comes at a cost and with the need to find further financial resources over the coming years. Added borrowing will be dependent on sufficient revenue growth and available cashflow while added funding through new shares will depend on the stock value to rise again and show prospect of future rises, a challenge which was not helped with the recent decline in share prices which as of yesterday’s close of business remained slightly below 9 Kenya Shillings per share.
Getting the service on the ground right to match the service levels in the air will be one of the tasks the incoming CEO and his team will have to face up to. The arrival of additional passenger busses over the coming months will finally allow to provide premium passengers with their own vehicles when their aircraft is parked away from the terminal, and when the arrival section in Terminal 1A is open will a separate Premium channel, similar to the one at departures where Business Class passengers have their own entrance into the terminal and their dedicated check in facilities, help to make flying with Kenya Airways even more attractive.
For added details on the airline’s schedules, special fare offers, Kenya Airways Holidays and of course for the online check in, click on www.kenya-airways.com
