Companies

Kenya Airways passenger traffic stagnates in first quarter

KQ

A Kenya Airways plane. Kenya Airways passenger traffic in the first quarter to June remained unchanged, in what is likely to delay the quick recovery of the national carrier.

Kenya Airways passenger traffic in the first quarter to June remained unchanged from the previous quarter, in what is likely to delay the quick recovery of the national carrier.

Data for the three months show passenger numbers remained at 841,238 passengers, as poor performance on the European, Asian, and domestic routes offset the 2.9 per cent growth on African routes—which account for 52.9 per cent of its traffic.

This performance will likely delay the turnaround of Kenya Airways, which reported a net profit of Sh1.7 billion in the year to March 2012 compared to Sh3.5 billion the previous year. Its direct costs went up by 44 per cent to Sh77 billion, mainly due to expensive labour and oil prices. Revenues increased 25.6 per cent to Sh107.8 billion.

The suspension of flights to Rome saw the airline's capacity in Europe shrink by 18.8 per cent leading to a drop in passenger numbers to 89,852, compared to 108,835 in a similar quarter last year.

Reduced capacity in the region was “occasioned by the Euro Zone crisis,” a statement by the airline said. “Europe recorded the highest reduction due to the economic challenges facing the Euro-Zone economies”

Europe accounts for 25 per cent of the airline's revenues, as of its last financial results for the year ending March 2012. The airline is hoping to fill more of its seats this quarter with the ongoing demand from those attending the Olympics in London.

KQ’s communication manager Chris Karanja said the airline will be operating between seven and ten weekly frequencies, on the Boeing 777, on the Nairobi-London route depending on demand. The airline operates a daily flight on this route.

Reduced passenger numbers on this route has seen Virgin Atlantic announce its intention to withdraw the route in September. In the statement announcing its withdrawal, the airline cited high costs and low passenger numbers.

According to the International Air Transport Association (IATA), industry lobby groups, traffic growth for Europe has remained flat since the beginning of 2012, in line with the economic pessimism in the continent.

Africa has continued to be the airline's mainstay with North Africa leading the growth with a record of 28.7 per cent, mainly due to increased frequencies to Juba. The airline has two daily flights to Southern Sudan.

Southern Africa recorded a 1.3 per cent growth while growth in West Africa was 6.7 per cent mainly from the new circular routes linking Lagos and Accra, Ouagadougou and Dakar and Cotonou and Bamako cities.

Passenger traffic on the continent, excluding Kenya, grew by 2.9 per cent to 445,143.

Passenger traffic in Asia and the Far East remained constant at 124,056 despite the airline introducing flights to Jeddah and New Delhi which contributed to a capacity increase of 15 per cent. The percentage increase in the number of seats sold in the region dropped to 68.1 per cent compared to 78.3 per cent the previous year.

KQ is expected to increase flights in the domestic market this financial year with Eldoret and Lamu in the pipeline, a move that will see passenger numbers increased,

As of June 30, the numbers of domestic passengers dropped by 1.4 per cent to 182,187. Capacity reduced by five per cent compared to the prior year due to deployment of lower capacity aircrafts to Mombasa, from the Boeing 737 to the Embraer B190.

Kisumu, however, recorded a capacity growth of 33.6 per cent due to the deployment of larger aircrafts and increased frequencies.

Reduced exports from Kenya also saw cargo tonnage drop by 3.9 per cent with capacity reducing by 7.6 per cent. The volatile economic conditions in Europe was one of the main factors leading to reduced volumes.