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Why KQ has defied pressure to abandon West Africa route

naikuni

Kenya Airways CEO Titus Naikuni (left) addressing the Press at JKIA August 14, 2014 where he announced that the airline would not cancel flights to West Africa. He was flanked by Health secretary James Macharia (centre). PHOTO | BILLY MUTAI | NATION

Summary

  • MPs say continued operation in the region puts the country at a very high risk of infestation by the deadly disease and amounts ‘to putting profit before people.’
  • KQ, which flies 44 times a week to 10 West African cities, said it would continue servicing all the destinations’ routes, partly with the support of the government which sent Kenyan doctors to Liberia to assess the situation.
  • Cancelling flights to Ebola-stricken areas therefore means KQ would not only forfeit a substantial part of its earnings but also hand it over to competitors.

National carrier Kenya Airways Thursday resisted heavy pressure to stop flying to key West African markets in the wake of a deadly Ebola outbreak that has killed more than 1,000 people in the past six weeks.

The airline instead announced that it would continue flying to Ebola-stricken Liberia, Sierra Leone, Guinea and Nigeria — the epicentre of the epidemic that has been abandoned by some of the world’s major airlines including British Airways and Lufthansa — but would enhance its surveillance of the passengers.

“The World Health Organisation (WHO) has not advised us to stop flights from the affected areas,” said Titus Naikuni, Kenya Airways’ outgoing chief executive officer.

“In view of this advice the Kenya Airways management does not see a major risk that warrants stopping operations in the region. This means we will continue with our flights while reviewing the position on a daily basis.”

The announcement came a day after the WHO declared Kenya a high-Ebola-risk country because of its position as a major transit hub in sub-Saharan Africa.

READ: WHO marks Kenya as Ebola high-risk zone
KQ, as the airline is popularly known, also came under intense political pressure on Wednesday to stop flying to Ebola-stricken West Africa.

Members of Parliament said continued operation in the region put the country at a very high risk of infestation by the deadly disease and amounted ‘to putting profit before people.’

Speaking under the auspices the Parliamentary Human Rights Caucus, six MPs asked the Kenya Airports Authority (KAA) to forbid the entry into Kenya of flights from countries currently facing the Ebola crisis.

“In our opinion, KQ’s continued operations to West Africa is a short-term prioritisation of private corporate profits while exposing the whole country to risk and potential long-term damage to our nation’s people, health system and economic interest,” the MPs said.

KQ, which flies 44 times a week to 10 West African cities, said it would continue servicing all the destinations’ routes, partly with the support of the government which sent Kenyan doctors to Liberia to assess the situation.

READ: Crisis team to visit Ebola-hit West Africa as KQ flights continue

KQ’s strong opposition to abandoning the West African routes is informed by the huge contribution that Africa makes to the airline’s revenues.   

The airline earned about Sh48.6 billion (or 54 per cent of last year’s Sh90.1 billion annual revenue) from African operations — excluding Kenya — where it flies to about 36 destinations.

West Africa’s contribution to the total Africa revenue is significant because the region accounts for 10 or more than a quarter of the destinations.

Stopping West African flights therefore poses the risk of significantly cutting the airline’s topline and ultimately the bottom-line especially because it comes at a time when rampant insecurity in Kenya has depressed passenger numbers in key European routes. 

KQ remains deep in the red but made significant progress towards recovery in the past financial year having halved its annual loss to Sh3.3 billion from Sh7.8 billion the previous year.

KQ has pegged its performance this year on growth from key African and Asian markets as well as the removal of travel advisories that key European source markets have issued in recent months.

Over the past 10 years, Kenya Airways has built a massive operational strategy that connects Africa to the world through its Jomo Kenyatta International Airport (JKIA) hub. Plans have been afoot to extend the airline’s footprint to every African capital by 2016.

West Africa stands out as one of the regions where KQ has been aggressively advancing its expansionist agenda with the opening of new routes and increase of flights to major cities.

Growing interest in West Africa is fuelled by the fact that the region’s aviation industry remains underdeveloped following years of civil wars that destroyed existing infrastructure and crippled national carriers.

West Africans have come to heavily rely on connecting flights to Nairobi and Addis Ababa when travelling within and out of the continent.

KQ’s refusal to stop flying to West Africa is also driven by the fact that its main rival, Ethiopian Airlines and even upcoming RwandAir have braved the Ebola crisis to continue servicing the region.

KQ is also defending its key African market from invasion by big Asian carriers such as Dubai-based Emirates.

Ethiopian Airlines in May introduced daily flights to Nigerian cities of Abuja and Kano. Emirates regularly connects passengers from the two Nigerian cities to the rest of the world through its Dubai hub. The Middle East carrier also operates two daily flights to Lagos.

KQ introduced direct flights to Nigerian capital Abuja in June, targeting a share of the big passenger volumes flying in and out of Africa’s biggest economy.

KQ, which already had 10 flights to Lagos (Nigeria’s commercial capital) at the time, flies the passengers to Nairobi for connection to global destinations like Asia and the United Kingdom.

Cancelling flights to Ebola-stricken areas therefore means KQ would not only forfeit a substantial part of its earnings but also hand it over to competitors.

Ethiopian Airlines, the most profitable airline in Africa, also flies to Sierre Leone, Nigeria and Liberia, connecting passengers from the region to the rest of the world through its Addis Ababa hub.

“Even if we cancel our flights, we will still have passengers from those countries flying in here,” said Mbuvi Ngunze, KQ’s CEO-designate, adding that KQ is not working in isolation.

Korean Airlines Thursday announced that it would stop flying to Kenya on August 20, a pointer to wider economic ramifications of the Ebola crisis.

The airline, which operates three return flights from South Korea to Nairobi a week, said it would only resume flights once the conditions change.

Korean Airlines’ decision to stop flying to its only African destination was based on fears that such a flight could easily let the disease through its borders.

If other airlines were to follow suit, Kenya’s tourism would suffer yet another severe blow at a time when it is hurting from insecurity and travel bans issued by the US and the UK governments.

Additional reporting by Edwin Mutai and Sarah Ooko