KENYA: Fly540 Tyre Gets Stuck In Pothole, Pilot Aborts Take off

A Fly540 pilot was forced to abort take-off after realising one of the plane’s tyre was stuck in a pothole on the runway at the Manda Airport in Lamu County, southeastern Kenya.

The 36 scared passengers aboard the Nairobi-bound plane disembarked during the Sunday 12.30pm incident. No one was hurt.

Engineers and other airport staff were called and had to dig the plane’s left tyre out of the pothole using shovels and hoes.

The plane was about to take-off but it was difficult. The pilot had to stop abruptly especially after realising that one of the plane’s tyres was stuck in a huge pothole on the runway.

Engineers and airport staff had to be called and assisted in pushing the plane out and parked it at a safer location on the runway from where it was finally able to take-off safely.

All was fine as the plane taxied on the runway ready for take-off.

Trouble came just seconds as the plane started to lift its wings in readiness to fly. We saw the tyre on the left side stuck inside a huge hole on the runway.

We thank God that the pilot acted swiftly and switched off the engine of the plane. It was a scary moment said an eye witness.

A Fly540 official who spoke to journalists at the Manda Airport said checks were made later to ensure the plane was in good condition after the incident.

The plane was to take-off at exactly 12.30pm but the issue caused a delay. It took off at 12.54pm after checks were made to ensure the incident hadn’t created any other issue that could interfere with the flight.

Following the Sunday incident, travelling agencies, tourist stakeholders and passengers have called on the Kenya Airports Authority (KAA) to urgently intervene and reconstruct the Manda Airport runway.

The airport was put on the spotlight in 2017, when Kenya Airways' low-cost airline Jambojet suspended flights citing dilapidated conditions.

At the time, Jambojet said the apron, taxiway and runway were in bad shape, making it difficult for aircrafts to land or take-off.

Aviation stakeholders said the poor state of the airport puts lives at risk.

We’ve raised the issue concerning the poor state of our airport, particularly the runway but our calls over the years to have it reconstructed have not been successful.

As we speak, the airport runway is covered in massive potholes which continue to pose a danger to navigation. Should we wait until a fatal accident occurs?

Mr Ibrahim Abdalla, a tour guide, called for expansion of the airport saying visits to Lamu have increased.

The high tourist season has already begun and the Manda Airport seems to be overwhelmed with the increased number of carriers plying the region. It’s better they reconstruct and expand the airport and also introduce 24-hour operations. Lamu is growing, said Mr Abdalla.

Tourism Observer

UNITED KINGDOM: Body Of Man Fall Off Kenya Airways

The body of a man fell from a Kenya Airways plane into a London garden before the plane landed at Heathrow Airport.

The body landed in a garden in Lambeth, South London, at 3.42pm on June 30, according to a statement from airline operator Kenya Airways.

It is believed the man was hiding in the undercarriage of the aircraft. The owner of the garden called police and they have linked it with the Kenya Airways flight from Nairobi to Heathrow.

A statement from Kenya Airways said: “The Metropolitan Police in London have informed Kenya Airways of a body that fell off the landing gear of its aircraft moments before the flight landed in London Heathrow Airport.

On June 30 at 15:42hrs (UK time) a body of a yet to be in deified male stowaway landed in a garden in the Borough of Lambeth, South London, suggesting the stowaway was hidden in the undercarriage of the aircraft.

The police have already been in contact with the Kenya High Commission to help identify and name the person.

The air craft was inspected and no damage reported. It was also cleared for operation.

The Met Police added they are still trying to identify the man.

A bag, water and some food were also discovered in the landing gear compartment once it landed at the airport.

A statement said: Police were called at 15:39hrs on Sunday, 30 June to a residential address after a body was discovered in a garden.

Officers attended with the London Ambulance Service. The body of a person, believed to be a man was found.

A post-mortem examination will be carried out in due course. Police are working to establish the man's identity.

A crime scene was put in place but has since been closed.

The death is not being treated as suspicious. Enquiries are underway to establish the full circumstances.

The 4,250-mile trip from Nairobi to Heathrow takes around eight hours and 50 minutes.

One witness recalled hearing an almighty bang while she was in her garden.

She said: At first I thought it was some scaffolding falling down and thought nothing more about it.

My husband decided to see what was going on and went upstairs to take a look.

He didn't tell me what had happened at first. He was obviously quite shocked and went out into the street where my neighbour was standing on the phone to the police.

He was really shaken up. He'd been in the garden when it happened and the body must have landed so close to where he was.

My husband came back in and I asked him what was going on and he said ''Haven't you seen the man? - the man who fell from the sky?'

I wondered what he was talking about and went up to see for myself and there in the middle of the lawn was a body of a man.


Tourism Observer

KENYA: KQ Pilot Saves 95 Passengers Flying From Mombasa ToNairobi

A Kenya Airways pilot on Monday saved 95 passengers and 5 crew members who were headed to Nairobi from Mombasa.

The captain was forced to take precautionary measures after the aircraft's warning system raised a false mechanical alarm.

The flight KQ605 departed Mombasa at 1754 hours and was airborne at 1807hours. However, it was forced to land back in Mombasa at 1834hours.

In a press statement by Kenya Airways, engineers declared the aircraft grounded after they assessed it.

Other passengers with connections beyond Nairobi have been given accommodation in Mombasa to travel tomorrow to their final destinations, part of the statement read.

The airline apologized for the inconvenience and further advised its clients to contact customer care for any queries.

In yet another incident that occurred on March 28, 2019, the pilot of a Kisumu-bound plane saved the lives of over 70 passengers after the plane was unable to land at the Kisumu International Airport.

Upon reaching Kisumu, the pilot observed that the weather conditions were not optimal for landing.

After circling above Lake Victoria for some time to wait for the weather to clear up, he decided to fly back to Jomo Kenyatta International Airport.


Tourism Observer

KENYA: Kenya Airways Halts Flight From Nairobi To Mombasa Because Of A Bird Strike

A Kenya Airways flight heading to Mombasa was on Friday morning forced to make an about turn after a bird strike caused an engine glitch.

According to the airline, flight KQ604 departing from Nairobi to Mombasa at 10.15 am encountered a bird strike.

This was two minutes after take-off and as a standard precautionary measure, the pilot decided to turn back, landing safely at 10.27 am.

We are glad to report that all the 87 passengers and five crew on board are safe, the airline said.

The passengers have been redistributed to KQ 608 and 616 which have been upgraded to Boeing787.

Kenya Airways has apologised to affected passengers adding that engineers are currently assessing the damage on the affected left engine of the Embraer E190.

A bird strike - bird ingestion - is a collision between an aircraft. It is considered a significant threat to flight safety.

Although there is no absolute figure on the number of accidents caused by bird strikes, a report by the International Air Transport Association (IATA) shows 1300 of such cases are reported annually in US alone.


Tourism Observer

KENYA: Passengers Stuck At Jomo Kenyatta International Airport Due To Technical Faults

Passengers at Nairobi's Jomo Kenyatta International Airport (JKIA), were left stranded following major delays on Sunday afternoon.

An employee at the airport confirmed: Yes, we are experiencing several delays at the airport resulting from a technical glitch that engineers are working to resolve at moment, she disclosed.

However, renown Kenyan journalist, Larry Madowo tweeting from a plane at the airport claimed that they had been stuck on the tarmac for over half an hour due to a total radar systems failure.

Nairobi Air Traffic Control reportedly goes manual at JKIA after radar control system failure. We have been stuck on the tarmac for over 30minutes now, revealed an excerpt of his tweet.

Air traffic controllers provide direct aircraft on the ground and through controlled airspace, with their primary purpose being to prevent collisions, organize and expedite the flow of air traffic.

These controllers use the radar control system to coordinate the movements of thousands of aircraft, keeping them at ­safe distances from each other as well as directing them during takeoff and landing from airports in order to ensure that traffic flows smoothly with minimal delays.

Plans at the international airport are said to be maintaining a holding pattern as staff worked on clearing flights manually.

The delays come barely a month since a passenger was arrested for allegedly raising a false alarm in a Johannesburg bound Kenya Airways plane that forced the flight to abort take off at the national airport.

This forced the airport to be closed temporarily as police conducted a search that lasted for the better part of the day.


Tourism Observer

KENYA: Kenya Airways Poor Handling Of Passengers Letting It Down

Although I have been a strong supporter of Kenya Airways, I am slowly giving up on the airline.

It has a hopelessly insensitive management: On the ground, in terminals, in the air, and in the competitive aviation business.

A couple of years ago, while waiting to board a KQ flight from Entebbe to Nairobi one evening, my wife and I were shocked how casual the staff was regarding explaining why the flight was late, and why we had to stay in hotels overnight.

As it turned out, the so-called explanation was rather juvenile. We had been delayed due to "a technical hitch", which could not be rectified in time for the plane to take off and land at the JKIA before midnight.

When I inquired further from some of the crew who were equally disappointed, I was informed that such incidences were now very common with the late flight from Entebbe to Nairobi.

It was as if someone or some people were "trying to send a message" to top management at Kenya Airways. Apparently, this culture of "trying to send a message" has not changed.

This time, the message is not being sent to management; la sivyo! The message is being sent to los pasajeros — the passengers! Why do I say so? Let me recount to you yet another incident, this time at JKIA itself.

On Wednesday morning this week, I woke up early in Nairobi at 4 am to take the 6.15am flight to Kisumu. My guests, the Secretary General of the United Cities and Local Governments of Africa (UCLGA) and his deputy got to the airport ahead of me, checked in and proceeded to board the plane.

Arriving at the departure gate in a hurry to catch up with them, I discovered a menacing shower that made it rather nasty to walk to the plane parked close to 200 meters away!

I wondered why KQ management did not have the courtesy to provide us with a bus to take passengers to the plane in view of the awful weather! Someone in KQ was sending us passengers a message: "You have no alternative to fly except on our terms!"

Getting to the plane almost drenched I was livid! I started telling the crew staff a piece of my mind when I realised, rather belatedly, how innocent these creatures were.

The problem was not them but their bosses, who had zilch sense regarding how precious their passengers are.

Zero sense I tell you. A little thing like keeping a bus ready for passengers to get to a plane 200 meters away escapes a General Manager, a Station Manager, a Public Relations Manager, you name them!

You will never catch up with the likes of Emirates at this rate!

But why was I so mad? It was not simply because I had been rained on but more because my two guests, coming from the UCLGA, were in Kenya to assess how ready we are to host the 9th Edition of Africities Conference in Kisumu in November 2021.

By this terrible passengers treatment by KQ my guests could easily doubt the competence of our airport to provide good reception and send off for our guests in 2021. You dig?

When I chaired the Senate Select Committee on Kenya Airways in the last Parliament, we recommended that KQ's future could only be guaranteed if it joined hands with Kenya Airports Authority in a sound business deal that could see KQ/JKIA function as one business entity the Emirates/Dubai way.

But then the management of KQ needed to demonstrate sound business acumen and culture before leaping into this innovative venture.

There is absolutely no way in which this leap can be taken when KQ managers have zero sense of how to treat their most precious business partner: The passenger.

I am, therefore, slowly becoming rather sceptical of the edifice of KQ management.

What management substance are these guys made of? As my friend, Justice Richard Otieno Kwach, would wittingly ask: Where did they go to school?

What Kwach really means is that going to some "real" schools, and not "generic" schools, leads one not only to learn something but to imbibe some civic culture, some sense of public duty and some daily demonstration of appreciating "other-regarding acts" and not simply "self regarding acts."

KQ management has become obsessed with its own "self-regarding act" of survival they have forgotten the passenger, their most precious commodity in this very challenging aviation trade.

This is tragic and comical; in short tragicomical! You laugh at the foolishness of management while you feel pain for the passenger who must suffer to get the services from such a non-caring airline. What a pity!

Let us get our facts straight. KQ earns a hell lot of money from their domestic routes, particularly the Kisumu one.

And KQ must, in return, pay a hell lot of landing fees to KAA in return. Both companies are making a hell lot of money from us passengers. And they don't care much for our welfare. Let me flood you with a few more examples.

It has not occurred to KAA that the VIP room at the Kisumu International Airport no longer reflects its reputation as being international.

It is too small, too unimpressive and just too crowded. Receiving an international VIP there makes one feel woefully apologetic.

I should approach the KAA as governor of Kisumu so that I can put up a more presentable VIP station before November 2021 in time for the Africities Conference.

My business plan is sound and would benefit all stakeholders, including the passenger users themselves. But having proposed that I would not like to forget the awful VIP room at the domestic terminal 1D at JKIA.

Surely KQ, is your management oblivious to the fact that your own exponential growth in passengers should have entailed doing something about the growing limited space in this VIP room?

There is something called refurbishment, renovation and expansion in an industry like transport and hospitality.

How come KQ management is embarrassingly unaware of all that? Surely if my two passenger's eyes can see what seems to be obvious every day I pass through terminal 1D, how come KQ and KAA have remained insensitive to the changes needed?

Cry the suffering passenger!

The writer is the Kisumu Governor.


Tourism Observer

KENYA: 130 Kenya Airways Pilots Fled To Middle East Airlines In Past One Year, Needs 200 More

The Kenya Airline Pilots Association (KALPA) dismissed claims by Kenya Airways CEO Sebastian Mikosz that the airline's pilots are the best paid in Africa, gobbling up a large share of its income.

KALPA dismissed suggestions that its members' pay packages are part of the financial woes facing KQ and instead attributed the problems to high cost of tickets, poor management and high expatriates' pay.

Kenya Airways has lost 130 pilots to Middle East airlines in the past one year due to poor pay, the national pilots’ association has said.

The association said currently there are 430 pilots at Kenya Airways and that the national carrier needs additional 200.

The association's secretary-general, Mureithi Nyaga, told the National Assembly Transport and Housing Committee last week that if indeed they were the best paid in Africa as claimed by the Kenya Airways CEO, then their members would not have been lured by other airlines.

Mr Nyaga told the MPs that other international airlines have also been targeting KQ engineers whom he said are some of the best trained in Africa.

Our members have moved to the Middle East airlines who are offering better packages. Why are they not turning down the offers if they are the best paid by KQ? Asked Mr Nyaga.

He told the committee chaired by Pokot South MP David Pkosing that pilots flying Boeing earn a gross salary of Sh483,350 while those flying Embraer earn Sh407,916.

The captains, he said, get a house allowance of Sh36000 while first officers get Sh30,814.

Pilots who fly outside the country are also entitled to Sh20,000 as accommodation per night, he said.

The figures the CEO stated are exaggerated. I am not aware where the CEO of Kenya Airways got the Sh1.6 million he was telling you about, Mr Nyaga said.

Mr Mikosz, appearing before the same committee, had said the pilots take home Sh1.6 million per month despite flying only 533 hours in a year.

Mr Nyaga said that the pilots fly 780 hours in a year.

About half of Kenya Airways’ payroll is paid out to its pilots who form the minority of the workforce disclosures have shown, shinning the spotlight on the airline’s employee compensation.

An official document by the national carrier showed that although pilots accounted for 13 per cent of the airline’s total workforce, they took home the equivalent of 45 per cent of the overall payout to employees.

Staff under the umbrella of the Kenya Aviation Workers Union (KAWU) accounted for the bulk of workforce at 65 percent but took home an estimated 30.5 percent of KQ’s payroll.

Managers at the airline accounted for 22 percent of the workforce and drew compensation equivalent of 22 per cent of the payroll.

Expatriates represented 0.3 percent of the airlines workforce and pocket 2.6 percent of its payroll.

Going by KQ’s latest financial report for the nine months to December 2017, pilots were paid a combined Sh4.25 billion from the airline’s Sh9.45 billion wage bill for the period while the KAWU staff took home Sh2.89 billion.

The management took home Sh2.08 billion in salaries while expatriate staff received Sh245 million.

At the end of 2017, the airline had 414 pilots, out of its overall workforce of 3,548.

The revelations came as the struggling airline put up a spirited fight to take up the management of the Jomo Kenyatta International Airport (JKIA) as a way of strengthening its financial position.

The airline had proposed a merger with the Kenya Airports Authority (KAA) an issue that has stirred public debate and split its staff.

Kawu and the pilot umbrella body, the Kenya Airline Pilots Association (Kalpa), have been on differing ends of the table over the takeover bid.

The Kenya Aviation Workers Union (Kawu) told the parliamentary committee on transport that it was opposed the merger proposal, saying it will result in job losses and disadvantage other facilities managed by the KAA.

Kawu members went on strike last month to protest against unfair staff hiring, poor remuneration and the proposed takeover of the airport by the airline.

On the other hand, Kalpa has supported the merger bid although its officials admitted that they were not privy to the details of the Privately Initiated Investment Proposal (PIIP) presented by KQ.

Wage has been a key point of protest for employees of the carrier as the past five years have remained marred in industrial actions, some resulting in flight disruptions and others paralysing services on some routes.

The airline has been involved in protracted labour disputes with its pilots and has also suffered from poaching of talent by wealthy Middle East carriers that can afford to pay higher wages.

Technicians, engineers and other Kawu members have also downed their tools multiple times over salary disputes.

KQ has been targeting a reduction of its wage bill as part of a wider cost-cutting drive aimed at returning it to profitability after having reported the worst losses by a listed firm in Kenya in 2015 and 2016.


Tourism Observer

KENYA: Kenya Airways Says Pilots Are Overpaid Hence Affecting Income

Cash trapped national carrier Kenya Airways is blaming for its woes, overpaid pilots, low productive staff, poorly negotiated leasing agreements and exorbitant airport fees.

A candid prognosis by Kenya Airways management contained in a report handed to National Assembly Transport Committee chaired by Pokot South MP David Pkosing shows an airline on the verge of collapse.

The report shows that the carrier that was once the leading airline in the continent, was hurtling down the path to bankruptcy due to daily loses running into millions of shillings. The management blamed this on poor decisions made in the past.

Volatile fuel prices in the global market, costs of staff in particular cockpit and cabin crew, fleet ownership leases, finance costs, landing and navigation costs, distribution costs were highlighted as the other reasons for KQ’s fall from grace.

A captain at the carrier takes home Sh1.6 million monthly, making KQ’s pilots some of the highest paid globally.

A KQ Captain earns on average 11 times more than average employee in other high salary sectors and 29 more than the private sector average. Unfortunately, the pilots’ remuneration is not in line with their productivity, reads a document by the KQ management.

While significant salaries of the pilots are not unusual in the airline industry, KQ chief Executive Officer Sebastian Micosz says very influential trade unions and political pressure have made salaries payable to its pilots relatively high compared to their counterparts from wealthy airlines.

Kenya Airways, which has been caught up in a controversial bid to take up control of the Kenya Airport Authority (KAA) to boost its dwindling fortunes, also highlighted perennial industrial actions by its staff in pursuit of higher pay as part of their woes.

But it is the leasing of the aircraft that has come to haunt the carrier. Mikosz highlighted one particular instance in which the airline loses Sh200 million every month for the hiring of three Boeing 777-300 (ER)s wide body planes that were lying idle.

The three planes and two Boeing 737-800s had been sub-leased to Oman Air and Turkish Airlines.

Kenya Airways currently operates a wide body fleet of nine B787-800s alongside, three B777-300, two B737-700s, eight B737-800s and 15 E190s on flights covering East, West and South Africa, China, Thailand, India, the United Arab Emirates (UAE), Saudi Arabia, the Netherlands, France and the United Kingdom.

We made a mistake on the Sh100 billion leasing deal. The B777- 300 (ER)s was particularly a big blunder, its costs us Sh200 million every month to maintain each one of them, said Micosz.

But worst still, the management of Kenya Airways which made Sh4 billion in half year losses in 2018 complained of the high overheads in landing fees.

For instance, every time a KQ plane lands in a foreign airport, what it pays in charges help lower the costs of competing carriers through fuel distribution costs, handling services, maintenance and other services.

But when competitor’s plane lands in Nairobi, very limited stream of income goes to Kenya Airways as KAA and all the airport suppliers are not linked to KQ through any equity or exclusivity contracts.

Notably, unlike its competitors, KQ gets no preferential treatment in its own hub of operation, even though it is responsible for around 50–60 percent of overall traffic at JKIA.

Considering this, KQ will never be as competitive as other airlines and will continue to lose market share and generate losses, reads the report.

KQ has argued that in Ethiopia and Egypt models, the holding companies benefited from airport infrastructure, fleet expansion, new destinations, partnerships and acquisitions and marketing and traffic growth.

In the document, KQ management also identified the opening of Kenya’s airspace to the other African countries through the single African Air Transport Market in 2015 as a disadvantages to the national carrier.

Although the African market has been growing exponentially in the same breath, Mikosz says conditions surrounding Kenya Airways (KQ) and JKIA are alarming.

Kenyan aviation as a whole continued to lose market share over last couple of years to its competitors.

Ethiopian Airlines, which was half the size of KQ in 2010, has grown exponentially in recent years. It has outpaced KQ three times since then, argues Mikosz in the document to Parliament.

It notes that from 2015 to 2018, all competing carriers in the region increased their market share, Ethiopian by 20 per cent, Qatar by 12 per cent, and RwandAir by 22 per cent while the national carrier lost 4 per cent.

But despite the unfavourable external and internal conditions, Kenya Airways generated revenue of Sh52 billion in 2018.

KENYA: Kenya Airways Emergency Landing In Tanzania After Engine Burst Into Flames

New details have emerged after a Kenya Airways (KQ) plane was forced to make an emergency landing in Dar es Salaam, Tanzania, when one of its engines burst into flames.

The plane which had 142 passengers and 10 crew members en-route to Johannesburg, South Africa, from Nairobi, Kenya, managed to land safely, thus averting a potential disaster, but concerns have been raised on how KQ handled the emergency situation.

Internal investigation into the terrifying incident which took place on February 12, 2019, revealed there was laxity at the airline's operations control centre.

According to the report published on Tuesday, April 9, the national carrier's operations control centre failed to provide the necessary assistance to the crew on board during the emergency.

It was alleged the duty manager at the control centre who was expected those on board the Boeing 787 Dreamliner did not have a flight plan for the plane. The said manager then reportedly proceeded to advise the pilots to return to Jomo Kenyatta International Airport (JKIA).

The airline had previously indicated the plane simply developed a mechanical problem mid-air and that a team of engineers had been dispatched to Dar es Salaam to assess the situation.

The engineers reportedly found the plane had developed a problem on one of its engines, and that the issue was fixed and the aircraft cleared to fly again.

Responding to queries regarding the February 12 incident, KQ's CEO Sabastian Mikosz was quoted saying the engineers were able to establish what led to the emergency landing and recommended that the affected engine be replaced.

The airline initially appeared to downplay the magnitude of the incident, but the internal probe revealed the engine actually caught fire and that was what forced the crew to make an emergency landing in Dar es Salaam after shutting down the engine.

The report indicated the Boeing 787 Dreamliner had hours earlier landed at JKIA from New York after which it was scheduled to travel to South Africa.


Tourism Observer

KENYA: Kenya Airways Pilot In Trouble After He Refused To Fly An Alleged Faulty Plane.

Kenya Airways risks paying John Miriti Mbarire Ksh181 million after the pilot refused to fly an alleged faulty plane.

Mbarire's contract was terminated for causing a 34-minute delay in a flight from Nairobi to Kisumu and for allegedly using wrong channels to request a sick day.

At the time, he was five years from retirement and now he wants KQ ordered to pay his salary and allowances for the period, totaling Ksh170.3 million, and damages of ksh11.3 million for unlawful dismissal.

In its defense, KQ insists that Mbarire had a history of run-ins with authorities and his responses were considered insufficient by a panel that presided over his disciplinary hearings.

The pilot is accused of delaying the flight for 34 minutes and five days later he was served with a notice to explain why he should not be punished.

Mbarire argued that he could not guarantee regular braking once the aircraft touched the ground at Kisumu International Airport.

He also said that he feared that stress from the two flights he had completed that day did not make him the best person to fly the plane to Kisumu.

The pilot claimed that a colleague who last flew the aircraft had mentioned mechanical problems which he noticed as he directed the flight to Mombasa.

According to Mbarire, that was the third time the aircraft had exhibited mechanical problems on that day.

He said he feared it was too risky to fly the plane to Kisumu, which was at the time experiencing rainfall and thunderstorms, meaning the aircraft needed more than the 1,400 meters of available runway to safely land.

However, Kenneth Githuku, a chief pilot with KQ, claimed at the disciplinary hearings that the problem was attended to by engineers.


Tourism Observer

SUDAN: Kenya Airways And Qatar Airways Suspend Ticketing In Sudan

Kenya Airways and Qatar Airways suspended ticketing authorities in Sudan as a result of violent protests that have rocked the country since December.

The two airlines cite difficulties in repatriating foreign currency and other trade-related challenges.

Ticketing Authority (TA) is the airline’s authorisation to the International Air Travel Association (IATA) accredited agent to issue tickets on its behalf.

In light of the increasing foreign currency repatriation difficulties experienced, we regret to inform our trade partners that Kenya Airways is obliged to temporarily suspend distribution of Ticketing Authority in the Sudan market, a January 28 notice issued to the Sudan office by Kenya Airways reads in part.

As a result, Kenya Airways will suspend ticketing authority with immediate effect in Sudan. Kenya Airways is working to find a solution for this issue. We will communicate once a favourable solution is achieved, the notice reads.

Qatar Airways also issued a trade advisory notice to the partners in Sudan.

Due to commercial reasons, we regret to inform our trade partners that Qatar Airways will temporarily withdraw ticketing authority in Sudan market with immediate effect till further notice.

The suspension of ticketing authorities by the two airlines is a big setback to the country that is already grappling with a worsening economic situation.

The protests started on December 13 after the prices of bread shot up. At least 29 people have been killed, according the official government figures, while humanitarian agencies put the numbers higher.

The protests started in Ad-Damazin, the capital of Blue Nile State, spreading to Port Sudan, the capital of Red Sea State, and then Atbara where the National Congress Party headquarters was burned down.

Protests have since spread to other cities allover Sudan.


Tourism Observer

KENYA: Kenya Airways Commences Non Stop Flights From Nairobi To New York

The long-awaited direct flight between Nairobi and New York City became a reality last night with the flagging off of the first Kenya Airways non-stop trip.

The national carrier’s Boeing 787-8 Dreamliner touched down at the John F. Kennedy International Airport on 29th october.

The maiden flight departed from Jomo Kenyatta International Airport (JKIA) at around 10:55pm and was expected to land on Monday at JFK International Airport at 6:55 am (1:55 pm Kenyan time).

Kenya Airways has now reduced the more than 24 hour long journey and it will be the fastest connection from East Africa to New York City, with a 15-hour duration eastbound and 14-hours westbound.

Flights to the United States are usually characterised by long stopovers in Europe and Middle East.

While flagging off the maiden flight, President Uhuru Kenyatta said the non-stop flight to the US was a confidence boost to Kenya’s economy and a positive signal for increased foreign direct investments.

The non-stop flight between Nairobi and New York City is set to provide a seamless experience for business and leisure travellers alike. It will open up Kenya and the region to the world to enjoy our hospitality and diverse culture, he said.

Kenya Airways group managing director and chief executive Sebastian Mikosz termed it as a great milestone, adding that it will act as a catalyst for attracting corporate and high-end tourism traffic around the world to Kenya and Africa.

This will also boost the economic growth of not only Kenya but the African continent, he said. The flight had a crew of four pilots and 12 flight attendants.

The national carrier will operate its Boeing 787-8 Dreamliner with a capacity of 234 passengers on the route.

Kenya Airports Authority (KAA) said the launch was a culmination of processes, audits and assessments by US Federal Aviation Administration (FAA) and the Transportation Security Administration (TSA), an agency of the US Department of Homeland Security, that has authority over security of travelling public in the United States.

This led to JKIA achieving Last Point of Departure status, setting the stage for Kenya’s national carrier to fly directly to the US.

KAA termed the flight as an endorsement by the international aviation community on the investment they have made at JKIA in improving infrastructure and enhancing security, safety and passenger experience at the airport.

Kenya Airways flights will be departing every day from JKIA at 11:25pm arriving at JFK Airport at 6:25am the following day.

From New York, the plane will depart at 12:00pm and land at JKIA at 10:30am the following day. The national carrier said the schedule will enable connections to and from over 40 African destinations through Kenya Airways hub in Nairobi.

The national carrier is a member of the SkyTeam Alliance, flying to 52 destinations worldwide, 43 of which are in Africa and carries over four million passengers annually.

It has modernised its fleet with its 32 aircraft being some of the youngest in Africa, including its flagship B787 Dreamliner aircraft.

KENYA: Court Of Appeal Rules Against Kenya Airways Engineers And Technicians

A total of 115 engineers and technicians of Kenya Airways have suffered a blow after the Court of Appeal ruled that their reinstatement was wrong.

The court said that Justice Hellen Wasilwa’s order, which temporarily reinstated the staff, was without merit because the employees did not demonstrate special circumstances for reinstatement.

We reiterate that in our view, without hearing the parties and or in the absence of the appellant’s response to the motion, there is no way the court could have determined that special circumstances existed for the issuance of a mandatory injunction.

The special circumstances, if at all, had not been demonstrated, Justices William Ouko, Kathurima M’Inoti and Fatuma Sichale said.

The judges also agreed with airline lawyer Githu Muigai that Ms Wasilwa unilaterally took it upon herself, without expert evidence, to determine issues of safety of air travel.

Joseph Otieno Oyuga and 114 others moved to court in December 2017, after the airline fired engineers and technicians over what it called an illegal strike.

The striking workers were fired after they ignored three written requests to resume work.

Technical assistants were demanding a 70 per cent increase in basic pay while control and production engineers wanted a 250 per cent pay hike.

When they appeared before the Employment and Labour Relations Court after the sacking, Kenya Airways asked for case adjournment for a day to enable them file a response.

The judge granted the application and went ahead to temporarily reinstate the sacked employees due to sensitivity of the issues involving the aircraft and security of human lives.

The decision did not please the airline forcing it to file an appeal.

According to Prof Muigai, the judge erred by issuing an injunctive order, benefiting the employees yet there was no evidence and no sufficient evidence to support the application for an injunction.


Tourism Observer

KENYA: Kenya Airways To Face Stiff Competition Soon From African Airline

Nigeria has announced plans to revive its collapsed national carrier as Uganda ordered two Airbus planes, increasing pressure on Kenya Airways (KQ) which mainly flys African routes.

Nigeria on Wednesday launched its national carrier known as Nigeria Air, which is to fly in December targeting the West African market.

Uganda Airlines also announced the signing of a memorandum of understanding for two A330-800neo Airbus planes for its long –haul network.

Kenya Airways is already facing strong competition on its African and Asian routes as the average fare has declined due to competition.

In its annual report for the year ended December 2017, the national carrier stated that more than half the revenue decline was as a result of the drop in average fares on the routes.

This downward trend in fare is the result of increased competition and overcapacity on Intra-Africa and AfricAsia traffic flows.

The main competitors that Kenya Airways must contend with on these traffic flows include Ethiopian Airlines, RwandAir, Qatar Airways and Emirates, said KQ in its financial reports.

Increased capacity by its competitors has already taken a chunk of the carrier’s revenue.

Recent acquisition of planes by Uganda and Tanzania as well as the signing of a partnership between Ethiopian airlines and the Zambian government to revive the national airline for Zambia is only making the skies difficult for Kenya Airways.

According to Ephraim Bagenda, CEO of Uganda Airlines, the agreement with Airbus demonstrates economic growth supported by a robust aviation industry.

Tanzania Airlines received its first Boeing Dreamliner about two weeks ago.

The plane will poise the airline to connect Tanzania directly with other East African nations including Uganda and Burundi without having to fly through Nairobi, Addis or Kigali.

According to IATA, 2017 saw traffic for African airline grow by 7.5 per cent, yet the capacity rose at only 3.6 per cent. This, an indicator of the demand for more capacity on the various routes in the market.

KQ’s competitors have grown their capacities on these flows over the last two years while its capacity has declined marginally.

According to KQ’s annual report, Ethiopian’s capacity is up by about 20 per cent while RwandAir’s capacity is up 22 per cent.

Emirates and Qatar also have grown their capacity by six per cent and 12 per cent respectively. This resulted in significant downward pressure on fares as airlines fight for traffic to fill the flood of seats in the market.

In 2016, KQ suspended flights to Abuja and Gaborone as part of changes to its route network.

During the time, Gaberone was served via Johannesburg with partners.

In its 2017 annual report Kenya Airways blamed the decline in revenue on competition from other regional players, which resulted in lower fares.

Kenya Airways troubles may not be over yet following the recent move by Tanzania to revive its national carrier while Uganda is set to re-launch its airline in November with Ethiopia continuing to expand its fleet.

Air Tanzania will start flying to Entebbe from Dar es Salaam later next month, eating directly into KQ’s share of this lucrative market where it has dominated for the last 15 years after Uganda’s national carrier halted operations.

More than half of the revenue decline that was registered between 2016 and 2017 is attributable to a drop in the average fare recorded on African and Asian routes.

This downward trend in fare is the result of increased competition and overcapacity on intra-Africa and AfricAsia traffic flows, said KQ in its financial statement

While other airlines are expanding their capacity, KQ’s has declined marginally in the last two years.

For instance, Ethiopian’s capacity is up by about 20 per cent while RwandAir has grown by 22 per cent with Emirates and Qatar registering a growth of six and 12 per cent respectively in the last two years.

This competition resulted in significant downward pressure on fares as airlines fight for traffic to fill the flood of seats in the market, said KQ.

Air Tanzania has bought five aircraft so far: a Bombardier Q300, three Q400s and a long range Boeing 787 Dreamliner.

The Tanzanian government plans to fly its Boeing 787 to India even as it targets its southern neighbour Zambia, where KQ still enjoys a substantive market share.

Uganda is also in the process of reviving its national airline before the end of the year after the cabinet approved the plan.

This move comes at a time when Ethiopian Airlines, arguably Africa’s most profitable career, has turned focus on reviving some of the stalled airlines in the region.

The carrier has acquired a 45 per cent stake in Zambia Airways which is set to be re-launched after more than two decades.

Under the pact, the Zambian government will be the majority shareholder with a 55 per cent stake.

KQ has at least four daily flights to Dar es Salaam, fiver to Entebbe, four to Lusaka and one more daily flight to Livingstone (Zambia).

Ethiopian Airlines is also seeking to set up hubs in southern Africa, Central Africa and the Horn.

The airline said it is working with Malawi and Zambia as southern Africa hubs. Another hub will be in central Africa, covering the Democratic Republic of Congo, Congo Brazzaville and Chad.

Kenya Airways’ shareholder value moved into positive territory riding on last year’s balance sheet after restructuring which reduced its annual debt payment obligations, leaving room for revamping its operations.

KQ’s equity position stood at Sh417 million in the nine months between April and December 2017 compared to a negative Sh45 billion in the year to March 2017, according to a financial report released last month.

The change in fortunes follows a complex restructuring of the business that saw the airline’s main creditors —10 commercial banks and the government — convert Sh44.2 billion loans into equity to save it from collapse.

The airline has started expansion on some new routes including Mauritius where it has been code sharing with Air Mauritius. Later in the year, KQ will launch its inaugural flight to the US.

Ethiopian Airlines launched a new route to the US on June 2, its fourth destination in the country, in what appears to be direct competition with Kenya Airways.


Tourism Observer

TANZANIA: Air Tanzania Opening New Routes

Air Tanzania starts direct flights from Dar es Salaam to Entebbe and Bujumbura later next month, bringing competition to the doorstep of Kenya Airways and RwandaAir — and convenience and savings to the regional traveller.

The Kenyan and Rwandan national carriers have over the years dominated these routes via their respective hubs in Nairobi and Kigali.

The Tanzania national carrier, which is barely into its second year of operation, revealed that it will start a four times a week direct flight to Entebbe from Dar es Salaam and a three times a week flight to Bujumbura, on two routes which other airlines had tried to feed connecting traffic to their hubs.

The direct flights offer relief to regional travellers who have had to endure the complex and unattractive connecting options on these two routes, which are routinely time-consuming and costly.

For one to fly between Tanzania and Uganda, a connection must be made through Nairobi’s Jomo Kenyatta International Airport or Rwanda’s Kigali International Airport.

Air Tanzania will charge $363 for a return ticket to Entebbe, flying on Monday, Wednesday, Friday and Sunday.

Its Bujumbura clients will pay $358 for a return ticket with flights scheduled for Tuesday, Thursday and Saturday.

This is less than the average of $390 that travellers pay to get to Bujumbura and Dar es Salaam via either Nairobi, Kigali or Addis, with an additional three to six hours connecting time.

Direct flights to Uganda and Burundi will eat into the earnings of Kenya Airways, which has enjoyed a near monopoly of the Dar-Nairobi-Entebbe route, its most profitable in the region.

KQ’s 15 years of dominance at the Entebbe hub could end, especially if Uganda revives its national carrier by November.

Kenya’s Transport Principal Secretary Paul Maringa however said the plans by Uganda and Tanzania would not affect KQ, given that part of the efforts to revamp the airline are aimed at making it competitive in the region.

The increased competition will not affect the operations of Kenya Airways. We will bank on the service and brand to get an edge over the competition.

Kenya Airways remains dominant on most of the routes and the expected flight to the US will give it an edge within the region, Prof Maringa said.

KQ has at least four daily flights to Dar es Salaam, five to Entebbe, four to Lusaka and at least one more other daily flight to Livingstone both in Zambia, routes that Air Tanzania will be seeking to claw back in the short term as it charts its recovery.

Nicanor Sabula, the chief executive of the Kenya Association of Travel Agents, said the sector welcomes Air Tanzania as it will introduce competition and cut the cost of flying.

We will be cautiously optimistic because we understand the sustainability question that arises in running an airline.

The history of passenger numbers and traffic on particular routes has seen some airlines scale down frequency or even introduce connectivity in a bid to remain afloat.

So do not be surprised if Air Tanzania introduces another connection via Kigali because these routes are a game of numbers for an airline seeking to make money, Mr Sabula said.

Already, both Kenya Airways and RwandAir have been doing connections out of Kigali to Bujumbura for onward flights to Nairobi, mostly driven by the low numbers from Bujumbura.

Charles Kahuthu, the chief executive officer of the East African Chamber of Commerce, said that the lack of the traffic on some of these routes has been the biggest challenge.

We have seen an increase in trade and business opportunities between Dar and Entebbe. Dar es Salaam has been very aggressive in Uganda marketing its port and this has driven up trade between the two countries. This is the market this airline will be keen on serving, Mr Kahuthu said.

Air Tanzania is expecting a fourth aircraft, a CS 300 Bombardier, from Canada in November, for both domestic and regional routes.

The airline also plans to launch new routes to Harare, Johannesburg, and Lusaka. It will then consider the Rwanda and Nairobi routes.

Last weekend, it received the first of two Boeing 787-8 Dreamliners, which should start serving domestic destinations including Mwanza, Kilimanjaro and also Entebbe and Bujumbura, in the first week of August, after the fleet crew completes training.

We expect to use this aircraft on the Mumbai route and will later fly to Guangzhou in China as we seek business on the Asian routes, Mr Matindi said.

Currently, the airline operates one international flight to Moroni in the Comoros Islands. Domestically, it flies to Mbeya, Dodoma, Songea, Mwanza, Mbeya, Tabora, Kigoma, Mtwara and Bukoba.

We are also adding new domestic routes in Tanzania to include Iringa, Mpanda, Tanga as well as Shinyanga, which will push our destinations to 17 by the end of the year, Mr Matindi said.

Air Tanzania is in the process of establishing its own ground handling, maintenance, repair and overhaul hangar facility, the construction of an executive lounge and in-flight catering units at the Julius Nyerere International Airport as part of its restructuring and growth.

Just over half the routes 12 out of 22 are operated at lower than daily frequency and just over a third 8 out of 22 are operated twice daily or more.

This low frequency makes short-duration trips departing and returning the same day difficult, whereas these are particularly important for business trips.

The situation varies by country while nearly half the routes from Kenya operate twice daily or more, no routes from Burundi operate at that frequency and few do so in the other EAC countries.

Air Tanzania is set to introduce new routes in the domestic market in the next two years.

Air Tanzania Company Limited (ATCL) CEO Ladislaus Matindi on Wednesday said the new destinations will include Iringa, Mpanda, Tanga as well as Shinyanga.

Mr Matindi said the airline was currently operating 10 airways from the commercial capital Dar es Salaam to Dodoma, Mwanza, Mbeya, Songea, Tabora, Kigoma, Bukoba, Mtwara and the Comoros.

Other than the new routes we were also expecting to have a new aircraft CS 300 Bombardier in May, but has been delayed and will now arrive in November, said Mr Matindi.

Tanzania received its first long-range Boeing 787 Dreamliner at the Julius Nyerere International Airport (JNIA) in Dar es Salaam.

The new aircraft is expected to fly to domestic routes as it finalises preparations to inaugurate international flights.

The Dreamliner is expected to start flying locally three weeks from now. It will be flying between Dar es Salaam and Kilimanjaro before we start flying to India, added Mr Matindi.

The flag carrier is optimistic to launch its maiden cross-continent flight to Mumbai in September should things go as planned.

The purchase of new jets is part of Air Tanzania’s plan to grow its operations across Africa as well as to international destinations.

Tanzania’s airspace is currently dominated by low-cost carriers Fastjet and Precision that all operate both the domestic and international routes.


Tourism Observer

KENYA: It Is Easy To Fly But Even Easier To Fly An Empty Aircraft, Says Kenya Airways Sebastian Mikosz

The new chief executive of Kenya Airways Sebastian Mikosz is known for improving LOT Polish Airline.

Kenya Airways is renegotiating its debt with local banks. What progress have you made so far?

We are hopeful the banks will convert part of the money owed into equity. I am not at liberty to divulge much information at this point but we are at the final stages of the negotiations.

Before your arrival, KQ had started a transformation journey dubbed Project Pride. Do you intend to carry on with it?

Project Pride had the advantage of being systematic. I believe what has been done so far has been beneficial. I want to continue with its methodology.

But for an airline, decisions take time to manifest. We are reviewing the financial status one line at a time and ticking what needs to be done. There are things that we can renegotiate in the short term, and we have started doing that, but there are also those that will take longer.

For example, we cannot pull out of an exclusive contract or out of an airport at the snap of a finger; or terminate people who have been assigned tasks till the end of year.

We are redesigning what is within KQ’s operation, there is a team for that. My job is to bring about financial results and there is a technical way of achieving that.

Part of what your predecessor did was release some of the wide body aircraft in a bid to cut costs. But considering plans to launch direct flights to the US, do you have the long-haul aircraft to handle the route?

We subleased some planes, three 777s to Turkish Airlines and two 787 to Oman Air. I don’t see us bringing back the 777s in the short term, and quite honestly also in the long term.

My decision is to stick to the 787. It is a very good plane. It gives us exactly what we need in the short term. We can fly it to Europe, Asia, big African airports and even the US when that time comes.

To control the cost of these long-haul aircraft, the more of the same type of fleet you have the better your margins. If you have different types, then you need separate crew, spare parts and different operations.

For an airline, having less than 10 aircraft of a certain type is not efficient. We have nearly 10 Dreamliners 787, so we are good at operating them. I hope in the future we will have more of these aircraft but from a wide-body perspective, we are good.

When should we expect the first direct flight to the US?

I would be cautious about commenting on the date because launching a regular flight is a complex operation.

Besides the security details, there are other procedures like negotiating the slots, having contractors in New York, putting the flight in the IT system, preparing the crew and, the most important part, having commercial agreements.

It is easy to fly but it is even easier to fly an empty aircraft.

You are mostly known for turning around LOT Polish Airline; how will you use the experience at KQ?

The situation at KQ is similar to LOT’s where issues are handled only in a certain way. There is a need for a shift in mindset. There is no African or other way of doing things; there is only a good way and a bad way.

I have seen companies in Asia, Europe and many other places suffer similar problems. All you have to do is make the right decisions and offer customers what they need. There is no easy way out and there will be decisions that will rub some people the wrong way.

You brought on board staff you had worked with at LOT. Why did you?

First of all they are not part of the management; they are working with the management. I brought in people whom I trust to work with the team.

How much capital is locked up in African countries that do not allow free movement of foreign currency?

We have large amounts in Burundi and Angola. For the other countries, we are trying to negotiate and pull the money out. This is an issue we have tried to negotiate within the African Airlines Association as it does not affect KQ only.

It is something that worries me because you have a profitable route but if you bring in the impact of the capital lock it becomes unprofitable.

KQ has been losing key talent, particularly pilots and engineers. How do you plan to address this issue?

We shall be professional about it, by focusing on training our pilots in Kenya. We presented the proposal to the board because we believe there is a huge potential of training young Kenyans.

The airline has its own training centre. There are other options like bringing in foreign pilots for a while but this will not resolve the issue.

There are concerns about the cost of KQ tickets. Wouldn’t it be wise to lower the price of tickets and attract higher load factors?

I disagree that our tickets are overpriced. We must remain competitive. The whole issue revolves around balancing revenue, yield, load factor and being profitable.

My job is to strike a balance and the more revenue I have the better I am able to do so. So load factor is one of the key measurements, but we have routes with low load factors like 55 per cent that are quite profitable.

Some emerging regional airlines are threatening to eat into your market share. How do you plan to respond to them?

I am here to work on KQ in the environment given to me. However, I appeal to the government to look at the broader picture of how our competition is structured and financed.

Look at Turkish Airlines for example, where the government controls everything; the same applies to Emirates, Etihad, Qatar and Ethiopia. We are operating in an open competitive market well aware that these guys can hit us.

Mr Sebastian Mikosz is aged 44.

Mikosz Sebastian has over 20 years of experience in executive management in the private and public sectors.

Mr Mikosz is a graduate of the Institute of Political Studies in France and holds a Master’s degree in Economics and Finance from Sciences Po Paris.

Before joining KQ, Mr Mikosz was CEO of online travel agent eSky.pl for 15 months.

He previously held the position of CEO of LOT Polish Airline.

Mr Mikosz has also worked with audit firms Arthur Andersen, where he started his career in 1997 in Paris, and Deloitte as a director at its Warsaw office.

He also served as vice president of the Polish Information and Foreign Investment Agency between 2003 and 2006.

Mr. Sebastian Mikosz has been Group Managing Director, Chief Executive Officer and Director of Kenya Airways Limited since June 01, 2017. Mr. Mikosz served as the President of Management Board at LOT Polish Airlines S.A. since February 2013, also served as its Chief Executive Officer and President.

Mr. Mikosz served as President of Management Board and Chief Executive Officer at eSKY.pl SA since February 2016. He served as President Member of Management Board of LOT Polish Airlines until 2010 and served as its Acting Chief Executive Officer and Member of the Management Board.

He served as President of the Management Board at Polskie Linie Lotnicze LOT since 2009 and also from March 2013 to August 2015. He served as Senior Advisor in the Corporate and Investment Banking Department at Societe Generale from 2011 to 2013.

He served as Managing Director at CCiFP from 2001 to 2003. In 2000, he worked on establishing the first independent online brokerage house in Poland. He served as General Director of the French Chamber of Commerce and Industry in Poland since 2001.

He served as Managing Director of the French Chamber of Commerce and Industry in Poland (CCIFP). He served as Vice President of the Polish Information and Foreign Investment Agency since June 2003 until September 2006 and supervised the Departments of Investor Assistance, Regional Cooperation and Research and Analysis.

He served as Managing Director at the Warsaw office of Amrop Hever, a HR consultancy company. He has gained his professional experience working in Poland and France. He has over 20 years of professional experience in executive management both in the private and public sector.

He started his career in 1997 with Arthur Andersen office in Paris, where he specialized in investments in the emerging markets. He also held various non-executive roles as Supervisory Board member.

He served as Chairman of the Supervisory Board at WRO-LOT Uslugi Lotniskowe Sp. z o.o. from September 2013 to May 2015 and EuroLOT from May 2009 to December 2010. He served as Vice-Director at Polska Agencja Informcji I Inwestycji Zagranicznych from 2003 to 2006.

He has been a Member of the Supervisory Board at Przedsiebiorstwo Handlu Zagranicznego Baltona S.A. since May 18, 2016. He has been a Member of the Supervisory Board at Eurobank since November 2015 and LOTAMS since February 2015.

He serves as Member of the Supervisory Board at Euro Bank S.A. Mr. Mikosz served as a Director at Deloitte Business Consulting from 2007 to 2009.

He served as a Member of the Supervisory Board at Eurobank from June 2011 to February 2013 and PKS Cieszyn from June 2003 to September 2009.

Mr. Mikosz holds a Master’s degree in Economy and Finance from the Sciences Po Paris. He’s bilingual in French and fluent speaker of English and Russian.


Tourism Observer

KENYA: Kenya Airways Acquires $42.6m From Banks As Part Of Capital Restructuring At The Airline

Eight Kenyan banks including Equity and KCB have advanced national carrier Kenya Airways additional loans amounting to Ksh4.3 billion or $42.6 million as part of the ongoing capital restructuring at the airline.

The new debt is backed by government guarantees, protecting the lenders from the national carrier’s default.

The airline, known by its international code KQ, defaulted on the lenders’ initial facilities of Ksh16.7 billion ($165.3 million) and instead issued them with shares amounting to a 38.1 per cent stake as a compromise settlement.

Other banks that participated in the new lending to KQ are Commercial Bank of Africa, I&M , National Bank of Kenya, Diamond Trust Bank, NIC Bank and Ecobank.

Jamii Bora Bank and Chase Bank, who were in the original lending scheme, did not participate in the latest debt deals which occurred between April and December last year.

The same banks with the exception of Chase Bank (Kenya) Limited and Jamii Bora Bank Limited gave a new term loan to the company amounting to Ksh4.3 billion ($42.6 million), says the airline.

The new loans have an average interest rate of 7.2 per cent, significantly below the risk-free rate of 10.9 per cent on one-year T-bills.

The debt is scheduled to mature in 2027 and the government has committed to redeem it if KQ will be unable to repay the banks at that time.

The airline says the government has already issued guarantees worth Ksh1.4 billion ($13.9 million) to this end, with the backstop set to be enlarged in the coming years in line with the banks’ commitment to issue a total of Ksh17.5 billion ($175 million) worth of new loans to KQ.

The new debt is meant to fund refurbishment of aircraft engines and general business operations.

Besides the local banks, the African Export-Import Bank (Afrexim) of the United States also secured government guarantees for the loans it is advancing to KQ including for purchase of 10 Embraer E190 aircraft.

The airline is still in financial distress, raising the prospect that the government will step in to pay some of its obligations.

KQ says its debt service coverage ratio did not meet the threshold set on one of Afrexim’s loans as of December.


Tourism Observer

KENYA: Kenya Airways With Better Performance Goes To Mauritius

Kenya Airways commenced operations between Nairobi (NBO) and Mauritius (MRU) on 7 June, a 3,096-kilometre sector that the African carrier will operate four times weekly.

The investment and trade opportunities presented by this direct flight will certainly add value to both countries, commented Jan De Vegt, COO of Kenya Airways, on the service.

The route will also have great impact on our upcoming non-stop flights to New York JFK by reinforcing its attractiveness to the American premium leisure travellers, he added.

The SkyTeam member will connect the two airports using its fleet of E190s, with competition coming in the form of Air Mauritius which offers twice-weekly flights using its fleet of A319s.

Kenya Airways grew annual traffic by 71% over the past decade, with it flying 4.46 million passengers during the FY16/17 calendar.

As stated by De Vegt, the carrier will soon launch flights to New York JFK, a service which will begin on 19 October.

Presently this is the only new route scheduled to be launched by the airline from the Kenyan capital this year.

Kenya Airways is in an improving state at the moment.

While for the last financial year (FY16/17) it posted an 8.5% reduction in turnover to 106,277,000,000 KES (€855 million), its operating profit increased by an impressive 122% according to the airline’s last annual report.

Kenya Airways moved into the black by producing a 897,000,000 KES profit (€7.2 million – €32.9 million loss in FY15/16).

These positive financial indicators hopefully mean that it is in a more stable position to take on the risks associated with new route decisions.

Currently the airline has a fleet of 32 passenger aircraft when referencing ch-aviation, with this total being made-up of: two 737-700s; eight 737-800s; seven 787-8s; and 15 E190s.

The airline also has two 737-300s for freighter services, meaning in total there is currently 34 aircraft in its fleet, with the average age of the units being 6.4 years.

In FY16/17 Kenya Airways carried 4.46 million passengers, an increase of 5.4% when compared to its total for FY15/16.

In the same period, the airline increased its average load factor across its network from just above 68% to 72%, the first time that the carrier has passed the 70% threshold since FY11/12.

Last year’s result being the best that the airline has recorded since FY07/08 when it achieved a load factor of just under 74%.

Kenya Airways Routes
While the 5.4% increase in passengers numbers is indeed an improvement from the 1.2% rise that was observed between FY14/15 and FY15/16, it is only the fourth best year for growth in the period analysed.

From FY10/11 to FY11/12, traffic went up by over 26% from 2.89 million to 3.64, while a surge of above 12% was encountered from FY13/14 to FY14/15, and a 6.2% incline was recorded between FY07/08 and FY08/09.

While the distance between Nairobi and Mombasa by road is around 480 kilometres, the time it takes to drive the route can still take up to nine hours, meaning that flying is the most viable option for travel between Kenya’s two largest cities.

It is therefore of no surprise that the Mombasa route is the #1 for the nation’s flag carrier from the capital, with Kenya Airways offering between eight and nine daily flights on the city pair.

While it is the number one route, the link has saw annual seat capacity reduced by close to 14% between 2016 and 2017, the worst performance recorded of the airline’s top services from the capital.

One factor for Kenya Airways choosing to reduce its frequency on the route from around nine to 10 daily flights is due to the increased competition on the sector.

Particularly with the arrival of LCC Jambojet, a subsidiary of Kenya Airways, with it offering up to six daily flights.

Along with Mombasa, the domestic link to Kisumu the fifth largest route, has also seen a capacity drop, along with Bangkok Suvarnabhumi.

Of the routes in the top 12, three are the airline’s long-haul connections to Europe, namely Amsterdam, London Heathrow and Paris CDG, with two being domestic, two in Asia and one in the Middle East, and remaining four being in other African countries.

While the airline did add Victoria Falls to its network in 2017, the carrier has cut service to three airports since the beginning of 2016, namely Malindi - ended 7 August 2016, Gaborone and Abuja - both 13 November 2016.

The carrier’s next route launch from Nairobi is to New York JFK in October, a route it will operate daily on 787-8s, with this inauguration date being 18 months after the airline’s first flight to Victoria Falls.

In 2017 there was around 23,800 indirect passengers between Nairobi and JFK, with a US/African traffic origin split of 52/48, showing that there is more demand for the route from the US end of the city pair.

The top three hubs for connecting traffic between the two airports last year were Dubai 34% of traffic – all on Emirates, London Heathrow 16% – majority on British Airways and Doha 13% – all Qatar Airways.

So with two of the three top airlines serving indirect passengers being oneworld members, this is certainly an interesting move by the SkyTeam carrier which will surly be aiming to capture that demand.

Interestingly Amsterdam, a SkyTeam hub for KLM, which has a Kenya Airways service from Nairobi, was fourth in the rankings for JFK-bound traffic in 2017 9.7% – demand split between KLM and Delta Air Lines.

Kenya Airways, a SkyTeam member, has a well established hub at Nairobi, with it surely hoping to fill some capacity on its JFK service with feeder traffic.

Another airline which is not too far away geographically, which also has a strong based operation in East Africa, is Ethiopian Airlines (Star Alliance), a carrier with already well established services into the US including New York (Newark), along with a strong, global non-African route network.

In FY07/08, Ethiopian Airlines transported just over 2.50 million passengers, 100,000 less than Kenya Airways during that financial period.

In FY15/16, when Kenya Airways flew 4.23 million people, Ethiopian Airlines greeted just over 7.50 million, 3.3 million more than the Nairobi-based operator, showing that the Star Alliance member has been more ambitious with its growth in recent years.

Back in 2007, Kenya Airways offered just under 540,000 departing seats on non-African routes from Nairobi, with Ethiopian Airlines’ non-African network supporting 760,000 seats, around 41% more than its East African neighbour.

In 2017, the Addis Ababa-based carrier was offering 2.55 million one-way seats to points outside of its home continent, a whopping 311% larger than that being flown by Kenya Airways, with it only providing 620,000 seats.

Outside of Africa, Kenya Airways will be operating to eight airports in 2018, namely Amsterdam, Bangkok Suvarnabhumi, Dubai, Jeddah, Heathrow, Mumbai, New York JFK and Paris CDG.

In terms of the airline’s turnover, it intercontinental routes accounted for 48% of the money taken by the carrier in FY16/17 according to the airline’s financial report, down from 49% in FY15/16.

The only one of these city pairs that Ethiopian Airlines does not serve from Addis Ababa is Amsterdam, and while the Star Alliance carrier does serve Newark, the route is via Lome in Togo, meaning Kenya Airways will be the only carrier offering non-stop services from East Africa in 2018.


Tourism Observer

KENYA: Kenya Airways To Fly 10 Times A Week On Non-stop Flights To Cape Town And Commence Daily Flights To New York In October

Kenya Airways (KQ) will fly to Cape Town 10 times weekly following the introduction of direct flights to the South African city on Wednesday.

The three non-stop flights will depart Nairobi every Wednesday, Friday and Sunday as the carrier stretches its wings to capture the African market.

We are indeed very proud to increase our frequencies to South Africa to cater for the growing number of our customers who travel between Nairobi and Cape Town.

In addition to enhancing Africa integration, this new route will be beneficial to the tourism industry as it establishes vital links with our global network, said Kenya Airways Chief Commercial Officer Vincent Coste.

The national carrier began flying the Cape Town route via Livingstone in 2016, with seven weekly flights to the South African capital. This in addition to the three non-stop flights brings the tally to 10.

The carrier is set to have its maiden flights to New York as well as introduction of direct flights to Mauritius.

The carrier already has a pre-existing code sharing agreement with Air Mauritius, which flies between Port Louis and Nairobi.

This will mean that passengers from Kenya will from June have the option of flying daily to Mauritius.

KQ flies to 42 African destinations out of a total 51 globally.

Kenya Airways is set to commence daily flights between Nairobi and New York in October, marking a milestone for the national carrier that will cut the flight time between the two cities by more than seven hours.

Travellers have begun booking advance tickets for the airline’s maiden flight to the John F. Kennedy International Airport (JFK).

Kenya Airways has already secured a landing slot at JFK.

The trans-Atlantic flights, scheduled to depart Jomo Kenyatta International Airport (JKIA) at 10:30pm every day, will last 15 hours.

This is a reduction from the current flight time of over 22 hours, including lengthy layovers.

We are currently loading the flights onto our system. We shall go live and ready for bookings on Thursday, says Kenya Airways chairman Michael Joseph in a telephone interview.

The launch of direct flights between Kenya and the United States will mark a significant milestone for the business and for the country.

Passengers travelling to JFK will arrive at 6.30 a.m., in time for morning meetings, while the return flight from JKF will depart at 1.30 p.m. and arrive in Nairobi at 10.30 a.m. the next day.

Each trip will have a maximum of 234 passengers, 204 in Economy and the rest in Business Class of the national carrier’s Dreamliner aircraft.

Kenya Airways, known in short as KQ, had announced its preference to operate the flights through a code-share partnership with US carrier Delta Airlines, its SkyTeam partner.

Delta, Virgin Atlantic and KLM Air France are KQ joint venture partner and shareholder are, however, currently working out a time-consuming merger, which has seen KQ opt to go it alone for now.

When this merger is over, we may add another flight to the US with a connecting flight through West Africa, said Mr Joseph.

The government, KQ’s top shareholder, has recently stepped up its campaign to actualise direct flights to America, with the Uhuru Kenyatta administration anticipating it will boost exports to the US and help jumpstart the tourism sector.

With about 100,000 tourists visiting Kenya every year for leisure and business, the US remains the top source of visitors into Kenya from the Americas, according to Kenya Tourism Board (KTB) data

Imports from the US stood at Sh47.8 billion in 2016, mostly consisting of machinery and equipment while exports, mostly garments and apparels, stood at Sh43.4 billion.

Kenya has recently implemented a raft of recommendations by the US government to enhance security, among them separation of passenger arrival and departure terminals, clearing the flight path and fencing off the airport.

As a result, the US Federal Aviation Administration (FAA) last February gave Kenya the Category One rating, paving the way for direct flights subject to other permits being received by the airport and KQ.

Mr Joseph now says the airline has secured all but two permits required for it to fly to the US, a position the Kenya Civil Aviation Authority (KCAA) director-general, Gilbert Kibe, confirmed.

JFK is yet to be cleared as the last point of departure, a security-based permit to be issued by the US Transportation Security Administration, said Mr Kibe.

The other outstanding permit is the technical authority to operate from the FAA. I am confident that KQ will receive the two in time.

Mr Joseph, who also exuded optimism about securing the twin clearances, said it was standard airline practice to put ticket up for sale at the closing preparatory stages of entering a new market.

JKIA’s longstanding second-class status forced passengers flying from Kenya to the US to transit through Europe, the Middle East or the four African countries, South Africa, Ethiopia, Cape Verde, and Nigeria whose airports have the designation.

Airlines plying the JKIA and JFK route include Turkish Airlines (through Istanbul), Qatar Airways (through Doha) and British Airways (through Heathrow), KLM (through Amsterdam) and Emirates (through Dubai and/or Italy).

Ethiopian Airlines and South African Airways also have flights to the US while RwandAir hopes to commence such flights later this year.

KQ’s foray into the US comes at a time when the airline is facing an uphill task to turnaround its fortunes, with a recent restructuring of its balance sheet seen as the last chance.

The airline’s management, which recently announced a Sh3.8 billion half-year net loss for the business, hopes that the new route will help boost the their flat revenues.

Imports from the US stood at Sh47.8 billion in 2016, mostly consisting of machinery and equipment while exports, mostly garments and apparels, stood at Sh43.4 billion.

Kenya has recently implemented a raft of recommendations by the US government to enhance security, among them separation of passenger arrival and departure terminals, clearing the flight path and fencing off the airport.

As a result, the US Federal Aviation Administration (FAA) last February gave Kenya the Category One rating, paving the way for direct flights subject to other permits being received by the airport and KQ.

Mr Joseph now says the airline has secured all but two permits required for it to fly to the US, a position the Kenya Civil Aviation Authority (KCAA) director-general, Gilbert Kibe, confirmed.

JFK is yet to be cleared as the last point of departure, a security-based permit to be issued by the US Transportation Security Administration, said Mr Kibe.

“The other outstanding permit is the technical authority to operate from the FAA. I am confident that KQ will receive the two in time.”

Optimistic

Mr Joseph, who also exuded optimism about securing the twin clearances, said it was standard airline practice to put ticket up for sale at the closing preparatory stages of entering a new market.

JKIA’s longstanding second-class status forced passengers flying from Kenya to the US to transit through Europe, the Middle East or the four African countries — South Africa, Ethiopia, Cape Verde, and Nigeria — whose airports have the designation.

Airlines plying the JKIA and JFK route include Turkish Airlines (through Istanbul), Qatar Airways (through Doha) and British Airways (through Heathrow), KLM (through Amsterdam) and Emirates (through Dubai and/or Italy).

Ethiopian Airlines and South African Airways also have flights to the US while RwandAir hopes to commence such flights later this year.

KQ’s foray into the US comes at a time when the airline is facing an uphill task to turnaround its fortunes, with a recent restructuring of its balance sheet seen as the last chance.

The airline’s management, which recently announced a Sh3.8 billion half-year net loss for the business, hopes that the new route will help boost the their flat revenues.

Kenya Airways' destinations outside Africa are:

- Guangzhou, China

- Paris, France

- Hong Kong, China

- Mumbai, India

- Amsterdam, Netherlands

- Jeddah, Saudi Arabia

- Bangkok, Thailand

- London, United Kingdom

- Hanoi, Vietnam

- Dubai, UAE

Kenya Airways (KQ) has been feted as Africa’s leading airline at the 24th Annual World Travel Awards held in Kigali, Rwanda.

This is the second consecutive year the national carrier has won the coveted title, beating other nominees including South African Airways, RwandAir, EgyptAir and Royal Air Maroc.

KQ was also named the winner in the Business Class category for the fifth consecutive year, while Ethiopian Airlines bagged the award in the Economy Class category - winning it for the fifth year in a row.

Winning these awards would not have been possible without the passion and dedication of the Kenya Airways team and the strong support from our guests.

Our guests are at the heart of everything we do at the airline and these two awards confirm our undeterred commitment to them, said KQ boss Sebastian Mikosz in a statement Wednesday.

Ethiopian Airlines was feted as Africa's leading airline brand, coming out tops in the category against Kenya Airways, South African Airways, RwandAir, EgyptAir, Tunisair and Royal Air Maroc.

Cape Town International Airport in South Africa was named the region's leading hub while Diani Beach in Kenya was named as Africa's leading beach destination.

The World Travel Awards serve to recognise, reward and celebrate excellence across all sectors of the global travel and tourism industry within each key geographical region.

Last year's ceremony was held in Zanzibar, Tanzania.


Tourism Observer

KENYA: Kenya Airways May Merge With Kenya Airports Authority

Kenya Airways may merge with the Kenya Airports Authority (KAA) as part of a grand plan to deepen the airline’s recovery and maintain Nairobi’s status as a regional transport hub.

A policy paper which got the Cabinet’s approval on Tuesday, says the aim is to reposition KQ in a similar fashion as its main rivals, including Ethiopian Airlines and Emirates Group, which have relied on government backing to expand their reach.

The move also appears to be in reaction to the financial difficulties the carrier has continued to experience even after last year’s completion of a major financial reengineering drive, causing concern that it may not be able to withstand competition in the very near future.

Should matters remain in the current state, KQ, the biggest revenue driver for JKIA - Jomo Kenyatta International Airport, may collapse or significantly reduce operations within the next year.

JKIA will downgrade and eventually be relegated to the status of a regional airport as no foreign carrier will develop JKIA for the benefit of Kenya, KQ and the KAA said in a proposal document to the Cabinet.

The policy document named Project Simba notes that the carrier’s recent financial restructuring to the tune of Ksh75 billion ($750 million) was insufficient to resolve its challenges.

Project Simba says that the airline’s fortunes must now be hooked to a comprehensive national aviation policy.

Through a public-private partnership (PPP) that could be signed by September, Kenya Airways will take over all the staff and operations of the KAA in a move that will at once expand the range of its services to include ground handling, maintenance, catering, warehousing and cargo.

It is also envisaged that a special economic zone will emerge around the country’s main aviation hub, JKIA.

The government is further expected to support the joint venture by exempting it from certain taxes and allowing it to retain several levies as part of the plan to stop financial haemorrhage at Kenya Airways and bolster JKIA’s status as an East African aviation hub.

KQ chairman Michael Joseph, who helped craft the plan said finer details, including the new entity’s corporate structure and its implications on the airline’s shareholders, will be worked out in due time.

It is still early days. All the pending issues will be discussed, Mr Joseph said.

Michael Joseph said the government needs to stop looking at KQ as a profit centre on its own but should use it as a tool to deliver wider economic benefits, including attracting foreign tourists and multinationals seeking to establish regional headquarters in Nairobi.

While JKIA is fully owned by the government through the KAA, KQ’s ownership includes private investors whose interests will be addressed through the appointment of transaction advisers and the refinement of the project details.

The government’s stake in the airlines stands at 48.9 per cent, followed by 10 local banks (38.1 per cent). The rest of the KQ shares are held by local and foreign institutional and individual investors.

In contrast, KQ’s rivals such as Emirates, Ethiopian Airways, Qatar Airways and RwandAir are fully owned by their respective governments in what makes it easy to build synergies between the carriers and their home airports.

The proposed project is expected to help KQ add a minimum of 23 aircraft and more than 20 new international destinations over the next five years.

This, in turn, is projected to lift annual passenger numbers to 6.9 million from the current 4.1 million.

Fundamentally, the joint assets will result in synergies, boosting airline-related revenues, increasing exports of goods and creating 25,000 to 30,000 jobs in the future, the parties said.

It is envisaged that the PPP will have the KAA as the contracting authority and KQ as the private party.

The concession, which will run for a minimum of 30 years, will be held by a special purpose vehicle (SPV) that will be fully owned by the national carrier.

The concession will have variable and fixed fees, with the latter earmarked to settle the KAA’s current liabilities that amount to Ksh5.1 billion ($51 million) per annum.

The government is ready to tweak tax laws to afford the project the necessary fiscal space to implement the ambitious plans.

These include exempting the SPV from valued added tax and exempting KQ from paying the Railway Development Levy and import declaration fees on aircraft, parts and utilities.

Kenya Airways is on track to solvency and is banking on route expansion, cost optimisation and improvement of service after posting a $60.4 million loss.

During the year the carrier restructured its balance sheet and reduced its annual debt payment obligations, allowing it room to revamp its operations.

In his first year as chief executive, Sebastian Mikosz has seen the airline’s loan repayments drop significantly to $91 million, from $250 million in the year to March 2017.

As at December 2017, the airline’s total debt stood at $1.39 billion, with total assets of $1.4 billion. Its operating profit stood at $13 million, from $8.97 million the previous year.

The results are an improvement from last year, when it posted an after-tax loss of $99.6 million. The airline is now seeking partnerships, new routes and cost optimisation to complete its path to recovery by 2020.

We will next month seek the board’s approval to add more than 20 new destinations in Africa, Europe and Asia over the next five years.

We plan to use the five aircraft Kenya Airways sub-leased to other carriers to build capacity and carry additional passengers, Mr Mikotz says.

The airline will this year take back two Boeing Dreamliners sub-leased to Oman Air, with one of them expected in the country by September, which it plans to use to ply its New York route starting October and is expected to boost KQ’s revenues by between eight and 10 per cent.

The other Dreamliner and the three Boeing 777-300 aircraft leased to Turkish Airlines will be returned to the airline by end of next year.

We are looking at at least one European and one Asian route on top of the African network. We might announce two to three new routes to start operating next year, Mr Mikotz said.

Airline chairman Michael Joseph also said they plan to partner with other airlines.

We are discussing with South African Airways to join forces on aircraft repairs, route sharing and other issues. For instance, we fly to similar destinations in Africa, so why not share these? Mr Joseph said.

This year the airline also changed its financial reporting date from March to December in-sync with other aviation players such as travel agents, financiers and lessors.

Right now, we are restructuring the business, finding ways to increase revenues and keep costs manageable, Mr Joseph added.

The $60.4 million loss, the airline said was due to the 14 per cent increase in fuel costs mirroring global fuel prices, and a 20 per cent drop in customer numbers.

Last year the carrier airlifted 3.4 million passengers during the nine months to December earning $808 million, but its operating costs consumed $795 million.

This was a drop from 4.2 million carried in the previous year, which the airline blamed on the prolonged electioneering, which saw passengers change their transit points from Nairobi to other African airports.

KQ’s equity stood at $4.17 million in the period under review compared with negative $450 million in the year to March 2017.

The change in fortunes stems from a complex restructuring late last year, during which its main creditors, including 10 local commercial banks and the government converted $442 million loans into equity.

This saved it from downfall as part of a $2 billion debt restructuring programme.


Tourism Observer