National flag carrier Kenya Airways has added another plane on the Mombasa-Nairobi route aiming to tap new revenue that is coming from increased demand for passenger services in the domestic market.
KQ is betting on the additional aircraft, a Boeing 737-300 to defend its share of the market that has been under serious attack from local rivals.
“Due to high demand on these routes, our passengers will use the new aircraft which still has KLM colours. Within the next two months the aircraft will spot the official KQ branding,” said the KQ’s chief operating officer, Bram Steller, who received the plane.
Increased competition ate into Kenya Airways’ domestic market share, with passenger numbers dropping six per cent compared to a similar quarter last year.
The airline transported 112,020 passengers in that period, reflecting a six per cent dip even as the Kenya Airports Authority (KAA) reported improved domestic travel this year.
According to KQ, adding the plane is in line with its strategy to increase the level of efficiency on the domestic and regional routes including offering passengers more choice in flying times and frequency.
The development comes after Kenya Airways ordered two Embraer 190 aircraft, expected to be delivered early next year and the recent expansion of the Embraer fleet to five after the airline acquired two additional aircraft last month, boosting its fleet to a total 28 planes.
Steller noted that the airline was keenly pursuing a fleet expansion plan that will support its route network growth especially in the African region, with new destinations like Luanda which begins next week.
“With Nairobi fast growing as the East and Central African aviation hub, we expect a profound growth in demand for Kenya Airways as the hub carrier to open up more new cities and increase frequencies on the existing ones with more flights,” he pointed out.
The national carrier lost the market share to local rivals, including Fly 540, Air Kenya, Safarilink and ALS who have boosted their presence in the local market with more frequent flights and new routes.
Kenya Airways’ decision to withdraw from some domestic routes such as Lamu and Malindi because of difficulties in landing could have also hit passenger numbers.
Kenya accounts for at least four per cent of the national carrier’s revenue, which means that a drop in domestic passenger numbers is unlikely to hurt its overall earnings since other routes recorded growths.
The airline, however, said it recorded a four per cent rise in passenger numbers to 666,658 with the European route posting the highest growth at 16 per cent.
The airline posted a pre-tax profit of Sh2.67 billion in the full-year ending March 2010, compared to the Sh5.66 billion loss recorded the previous year.
The move back to profitability was due to gains made on fuel hedging that amounted to Sh6.1 billion.
Kenya Airways has been facing major competition as domestic airlines aggressively move to increase flights and destinations.
Fly 540 recently announced new routes including Nanyuki, Amboseli, Lewa Downs and Samburu besides connecting Mombasa to these tourist areas.
But the airline has concentrated more on African expansion, which accounts for at least 45 per cent of its revenues.
In the first quarter, 366,225 passengers in the region used the airline, a three per cent growth compared to the previous year.
Kenya Airways also increased capacity and flights to capitalise on the World Cup that was held in South Africa between June and July.