KENYA AIRWAYS TAKES THE BROADSIDE OF ADDED EXPENSES AFTER JKIA FIRE
(Posted 12th August 2013)
National airline Kenya Airways has seen added cost and loss of ticket sales heaped upon it to the tune of over 4 million US Dollars, according to Dr. Titus Naikuni’s statement to the media yesterday, made in Nairobi.
Flight operations, Kenya Airways is the largest single user of JKIA, are being gradually restored and by mid week full services should be back on line, however with significant operating challenges for departing and arriving as well as connecting passengers due to the logistical problems airlines now encounter at JKIA.
‘Arrivals is totally burned down. Domestic has been shifted to the cargo side which required additional transport from Unit 3 where passengers come out after the clear immigration and customs. In the past it was just crossing the road by foot, now they need car transport. International arrival have to crowd through Unit 3 which was tailored to cater for domestic flights and departures too need basically more space than they have right now. These challenges will remain for all airlines but especially for KQ because they operate the most aircraft with the most flights to the most destinations from Nairobi’ said a regular JKIA based aviation source, shedding some light on what airline personnel now have to cope with in order to minimize inconvenience to passengers.
Aviation observers are divided on two issues at present, the full scale of the cost the airlines affected by the fire will need to absorb and secondly if they have an recourse to file insurance claims or liability claims, something which is presently being assessed by legal teams looking at ways and means to recover ad hoc expenses, which in the case of Kenya Airways could rise to well in excess of the figure now quoted by their CEO.
Meanwhile has the government apparently given the green light to KAA to go ahead and construct a temporary terminal facility able to process up to 2.5 million passengers per annum, a solution which a few months ago was discarded due to the cost but is now being revived as a result of the massive fire damage. Added the source: ‘Previously they felt that this added expense could not be justified and rather tried to accelerate the completion of the new Terminal 4. Now that has all changed. They are pushing left right and centre to have Terminal 4 ready on the fast track by end of Q1 next year but also now need options before the entire arrivals complex can be rebuilt. That in effect is now pulling forward that section of the airport because after Terminal 4 is complete, the present Unit 1 and 2 were to be refurbished and rehabilitated if not expanded in stages along with arrivals.
If they spend the money to put up that temporary terminal building, which I gather is sort of prefab and only assembled at JKIA, at least it is a bridging measure, not just till Terminal 4 is finished but also until Greenfield is completed in 2016 or 17.
In a related development it was also confirmed that Kenya Airways will go ahead with the deliveries of 2 more Embraer 190 jets and a B777 between the end of this month and the end of the year. A usually well informed individual close to the action at Embakasi said: ‘The fire is a big issue but the airline cannot just stop aircraft deliveries. The expansion of destinations and increase in flight frequencies is ongoing. The problems on the ground with handling now affect everyone, Kenya Airways most because they are the biggest airport user in Kenya. But life goes on and KQ is looking at the future’.
Insurance assessors are now on site at JKIA to start their painstaking work to compile and monetize the losses, for not just KAA and other government organs but shops, banks, car hire firms and airlines. It is unclear if KAA has in fact insurance which covers the loss of advertising revenues and royalties until such time that the facility can be re-opended, or if in fact shop owners and others may not seek admission of liability from KAA and claim damages in compensation for their losses. Watch this space for future updates.