Travellers arrive at Juba Airport. Kenyan airlines are reaping from increased traffic as Southern Sudan referendum pushes demand for passengers and cargo. Photo/ANTHONY KAMAU
Kenyan airlines are reaping from increased traffic to Southern Sudan as the country’s ongoing referendum pushes demand for passengers and cargo to record levels, raising the players’ profit outlook.
Data from airlines indicate that passenger traffic between Nairobi and Juba grew to slightly over 8,000, up from a monthly average of 5,800 passengers, an increase that has seen the carriers boost capacity on the route.
Secession vote
Executives at Kenya Airways, Jetlink, Astral Aviation, and Fly 540 say they expect the increased travel would spill over to next month when results of the referendum are announced.
“Business to Juba has been brisk with near full flights,” said a statement from Kenya Airways with sources at the firm saying the national carrier has been recording an occupancy rate of 60 per cent since it entered the route in June.
Demand is being driven by Sudanese nationals travelling to vote, non-governmental organisations, the regional business community as well as journalists and referendum observers from across the world.
This new demand is set to boost the earnings of the regional carriers because the route has one of the highest margin as return ticket costs more than Sh40, 000 ($500), which is higher than similar routes such as Entebbe (about Sh22,400 or $280) and Dar es Salaam (Sh33,600 or $420)
Jetlink, which has two daily flights to South Sudan, introduced a third flight in the days leading to Christmas to tap the new demand.
“Traffic on the route has grown and we anticipate it will continue until the end of the month,” said Elly Aluvale, managing director of Jetlink.
The same demand was experienced by Fly540 and cargo carrier Astral Aviation, the latter which has won contracts to ferry electrical materials to Juba and other southern Sudan towns.
“Business has been tremendous. We moved the election material in December just before Christmas,” said Sanjeev Gadhia, Astral’s chief executive, adding that the firm is expecting increased cargo business following the conclusion of the referendum vote, especially from NGOs and investors.
A week of voting began on Sunday for the referendum, which is expected to see the South emerge as an independent state-— seen as the most likely outcome.
The referendum was promised in a 2005 peace agreement that ended Africa’s longest civil war between the mostly Muslim north and the south, where most follow Christianity and traditional beliefs.
Preliminary results are expected around the beginning of February and final results before February 15.
Investors, especially from the East Africa region, have been moving to Juba to tap the boundless opportunities arising from the virgin market with financial service providers, industrialist and workers scrambling for a piece of South Sudan.
Kenyan companies such as Kenya Commercial Bank, Equity Bank, UAP and other smaller enterprises have already set up shop in the South while others such as Cooperative Bank, East African Breweries Ltd and Bidco are planning to head there.
Exports from Kenya to the region has more than doubled from Sh6.7 billion in 2005 to Sh16.7 billion in 2009.
South Sudan with a 12 million population remains virtually a virgin market without home grown manufacturing sector to meet local demand for consumer goods—an opportunity that is set to turn it into one of Kenya’s export markets.
The increased trade has led to rising demand for air travel between Juba and Nairobi, with Kenyan airlines reaping huge benefits from the opening up of the region — both with chartered and scheduled flights.
This has seen airlines scramble to venture there, with Kenya Airways being the latest entrant on the route.
Unlike Kenya Airways, the other players are mainly point to point carriers, giving the national airline the advantage of connecting passengers from other destinations through the hub of Nairobi to the Southern Sudan town.
This is the strategy the airline has been using in its expansion plans in the region.
Other regional airlines have also positioned themselves to reap from the increased demand. Egypt Air, Ethiopian Airlines and Air Uganda have been moving passengers through their hubs to Southern Sudan.
