Incoming CEO for Kenya Airways, 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, traffic from and to West Africa generally has taken a turn for the worse, aggravated by the suspension of flights to several destination like Monrovia and Freetown.
The airline sees as much as 4 billion in potential revenues lost during this financial year, which runs from April 1 to March 31. The situation for Kenya Airways has been aggravated by the downturn in tourism fortunes, as recently-released figures by both the Kenya Tourist Board and the Kenya National Bureau of Statistics now formally confirm.
Kenya Airways was earlier this year confident that they could turn the page on the losses of the past 2 years, but this latest challenge will no doubt make it only harder for them to return into profit territory.
On the upside, the move to brand-new Terminal 1A will 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, this ongoing process is 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 Jomo Kenyatta International Airports (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 make way for two brand-new lounges, Pride and Simba, by the end of October, which are also open for Kenya Airways’ alliance partners’ First and Business Class passengers.
To counter the downturn of fortunes in West Africa due to the Ebola factor, Kenya Airways began to deploy their latest acquisition, the B787-8 Dreamliner, on a 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 B767s. With Dreamliner number six’s arrival now just days away, more regional and continental routes will 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 trans-ship 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 – this aircraft type will 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 no doubt is needed at the Embakasi headoffice of Kenya Airways 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 cash-flow, 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, 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, will help to make flying with Kenya Airways even more attractive.
