Change for the better? Time will tell!


(Posted 04th June 2015)

As Kenya Airways is putting final touches to their financial reports for the 2014/15 Financial Year, which ended on the 31st of March and are due to be released later this month according to industry sources, are reportedly several consultancy teams studying and assessing the airline’s operations with the aim of improving yields and plugging financial leaks.

It is also understood that ‘Project Mawingo’ – the strategic 10 year plan the airline had launched five years ago and which covers the airline’s future until the FY 2020/21 – is being looked at afresh, taking more recent market developments into consideration and preparing to make adjustments where changed circumstances dictate.

Under this plan was the airline to grow the fleet by the Financial Year 2020/21 to 107 passenger aircraft and 12 freighters while expanding destinations across 6 continents to 115 in 77 countries. Given the launch dates of the strategic plan this would have seen the passenger fleet more than triple and the destinations more than double in the space of a decade, but half way through the plan it is clear that several targets have not been met at this stage, one of the reasons for a major review and revamp of Project Mawingo.

Hit by a double whammy last year, when the Kenyan government banned the airline from flying to parts of West Africa following a hysteria over the potential ‘import’ of Ebola – a measure which cost the airline between 4 and 5 billion Kenya Shillings in revenues – and the general downturn in tourism as a result of security issues – again something the Kenyan government is responsible for but which affected the airline’s passenger numbers – have the challenges for the airline risen. The announcement of a 10+ billion Kenya Shillings loss for the first half of the last financial year has shaken shareholders confidence, resulting in a drop in share prices. While the fuel guzzling aged Boeing B767-300ER’s were phased out and have now been completely replaced by state of the art Boeing B787 Dreamliners – two more are expected to be delivered this month and next month, completing the initial order of 9 such aircraft – were some of the airline’s B777-200’s mothballed as demand for travel into Kenya reduced after Britain slapped the country with excessively harsh anti travel advisories. Here speculation has been rife that the language used and the blanket coverage of almost the entire coastal resort areas has more behind it than just ordinary precautions, considering the fundamental disagreements on a number of bilateral issues between Kenya and the UK. While the UK High Commissioner to Kenya has been at pains to reassure the country that there was no ill will, common consensus in Kenya has it that such assurances from diplomats lack credibility and good faith.

The remaining B787’s, as a result of the financial challenges the airline is faced with, were in fact converted from outright purchase to lease and there has been talk of additional sale and leaseback agreements for other aircraft already on the fleet register.

The consultants who have been for a while pacing through the corridors and offices at Kenya Airways’ Embakasi headquarters are now under pressure to deliver their reports and recommendations to allow the airline’s top executives to incorporate those in the various statements due for publication when the financial results are announced ahead of the Annual General Meeting of the company.

On the upside has the move into the new Terminal 1A, together with other SkyTeam partner airlines, vastly improved the ground handling experience for passengers and onboard service continues to rank highly among travelers, especially in comparison with other competitors from the African continent.

If there is a constant in our lives, it is change’ quipped a regular source close to the airline before adding ‘We all hope that it is change for the better and that the best times for Kenya Airways are yet to come’.