African Airlines Show Impressive 20.7% Increase In Year-On-Year International Traffic

Airlines across Africa are reaping the rewards of increased demand, with the International Air Transport Association (IATA) reporting an increase of 20.7% in passenger traffic compared to this time last year. The collection of carriers includes, but is not limited to, Kenya Airways, Ethiopian Airlines, Egyptair, Royal Air Maroc, and Air Senegal.

African Airlines are surging forward with the expansion, which has seen capacity grow by 22.1% yearly, catapulting the continent’s aviation scene into a new realm. The growth has been expected as the world continues its post-pandemic thaw, and Africa’s numbers add to the 5.7% global increase in passenger numbers seen in February this year.

While demand and capacity are up, there is a slight increase in overall load factors across Africa, with a slight decrease in numbers seeing the region reach just 74%, a drop compared to the previous year.

Optimistic for the region

The ex-International Airlines Group boss and now IATA’s Director General Willie Walsh remains optimistic about travel across Africa. Walsh reiterates the positive momentum the region is seeing. Growth will be expected as more people look to travel, plus accelerated investment in airports and airlines and ‘resilient passenger demand’, as noted by Nairametrics.

Walsh did, however, clarify that the continued imposition of new taxes across Europe could be detrimental to growth not just in Africa but across the aviation industry and could lead to increases in airline ticket costs.

The numbers

Across Africa, domestic operations surpassed 13.7% growth compared to pre-pandemic levels, and between 2023 and 2024, there were 15% more operations. This was driven by strong demand over the Lunar New Year Period (however, it remains in the shadows compared to China during this time, which saw an increase of 31.5%).

When compared to February 2019, an increase of 0.9% was seen, with annual growth for international operations reaching over 26.3%. Operations towards Asia and the Pacific led the spike, with demand for travel between those regions and Africa witnessing demand surpassing 53.2%. For those destined for South America, growth between Africa and the likes of Sao Paulo contributed to a 21% increase in travel between the two continents.

Africa’s largest airline

Ethiopian Airlines maintains its status as the continent’s largest airline from its base at Addis Ababa Bole International Airport (ADD). As Simple Flying published in February, the carrier will operate up to 78 destinations across the African continent this year, adding Freetown, Sierra Leone, in May and Maun Botswana in June.

For international travelers heading towards North America, the carrier already serves up to 37 weekly flights between Ethiopia and the likes of Washington, Chicago, Toronto, Newark, Atlanta, and New York JFK. However, further growth is expected. Last November, the Ethiopian’s CCO disclosed that two additional North American destinations will be added “per year over the next few years.” He said Denver, Minneapolis, Seattle, Houston, and Montreal are coming.

Source:  Simple Flying  

Skyward Express opens new hub at JKIA

Skyward Express has opened a new hub at the Jomo Kenyatta International Airport (JKIA) as it steps up its quest to expand its services in the country.

The airline, which flies mainly from Wilson Airport in Nairobi, said Thursday that its JKIA base, which is operational effective today, will allow it to fly passengers to Mombasa and back.

The new hub will also offer an opportunity for international passengers landing at JKIA to connect to the coastal city via the airline.

“We have started operating flights to Mombasa from Terminal Two at Jomo Kenyatta International Airport in Mombasa effective today [Thursday],” said the airline’s general manager, Diana Nyambura, in an interview with the Business Daily.

“This strategic decision not only aligns with our commitment to providing enhanced connectivity to international travellers but also elevates our product offering to our dedicated clientele,” she said.

The airline has been flying passengers to Mombasa from its Wilson Airport base in Nairobi daily.

Ms Nyambura said the airline will carry passengers to Mombasa using a Fokker 100 jet aircraft.

The flight can carry up to 100 passengers and takes about 50 minutes from JKIA to Mombasa.

At its Wilson Airport hub, the airline will ferry passengers to Mombasa using a Dash 7 Q300 aircraft with a capacity of 50 passengers.

“The busy JKIA, a central aviation hub in East Africa, will now witness us enhancing our service offerings with a jet and the introduction of twice-daily flights to Mombasa (MBA), a route that promises to cater to business travellers commuting between the Port city and the Capital City of Nairobi,” she said.

Skyward Express flies out of Wilson with daily flights to Eldoret, Lodwar‚ Mombasa‚ Diani‚ Malindi and Lamu.

It also flies to Kakamega, Kitale and Migori in western Kenya.

Source: Business Daily Africa.

Exploring Innovations in IATA Payment Solutions for Travel Agents: Insights from the Inaugural Payments Summits.

30th March 2024

By: Bryan Obala

Membership & Communications, KATA

During the inaugural Payments Summits, the International Air Transport Association (IATA) provided a comprehensive overview of innovations in IATA Payment solutions. This presentation, led by IATA’s Country Manager East Africa, Agnes Mucuha, highlighted the organization’s Focus Africa initiative. This initiative is dedicated to maximizing aviation’s contribution to African development by enhancing services for passengers and shippers.

Focus Africa Initiative: The Focus Africa initiative, spearheaded by IATA, is geared towards delivering measurable improvements in six critical areas: safety, infrastructure, connectivity, finance and distribution, sustainability, and skills development. Of particular relevance to the Payments Summit discussion was the focus on finance and distribution, aiming to accelerate the implementation of secure, effective, and cost-efficient financial services, alongside the adoption of modern retailing standards.

IATA EasyPay (IEP): A significant aspect of the presentation centered on IATA EasyPay (IEP), an optional pay-as-you-go solution designed for travel agents. IEP provides a simpler and more secure method for transacting with airlines through the Billing and Settlement Plan (BSP). It’s noteworthy that IEP is a closed-loop electronic payment solution, voluntary in nature, and devoid of any charges, offering greater flexibility and choice for Accredited Travel agents to manage their business challenges.

From left: Agnes Mucuha, Country Manager East Africa, International Air Transport Association (IATA); Hamisi Hassan, Vice Chairman, Kenya Association of Travel Agents (KATA)

Advantages for Participants: IATA outlined the advantages of IATA EasyPay for participating Airlines and IATA Accredited Agents:

  • Voluntary: IEP is available to all IATA accredited agents, with the decision to use it resting with each agent. It does not intend to replace existing payment methods in the BSP.
  • Secure: IEP ensures security by requiring agents to fund their IATA EasyPay account. The system verifies fund availability at the time of ticket issuance, mitigating the risk of chargebacks for airlines.
  • Fast: IATA settles IEP amounts to airlines on a daily basis through existing BSP processes, ensuring prompt transfer of funds within 48 to 96 hours following ticket issuance.
  • Economical: With low transaction costs, IEP proves to be more cost-effective for airlines compared to credit card transactions.
  • Flexible: IEP transactions are secure, allowing agents to lower their financial security amounts with IATA and issue transactions outside their cash issuance capacity.

Expansion in Africa: An exciting revelation from the presentation was that the IATA EasyPay service is now available in 27 countries across Africa. Moreover, IATA is actively collaborating with authorities to expand into additional markets, demonstrating a commitment to support Africa’s aviation industry and modernize financial services and solutions across the continent.

In summary, IATA’s presentation at the Payments Summits provided valuable insights into the innovative strides being made in IATA Payment solutions, particularly through the introduction of IATA EasyPay. As the initiative gains momentum and expands its footprint across Africa, it promises to revolutionize financial transactions within the aviation sector, benefitting both airlines and travel agents alike.

Kenya Association of Travel Agents (KATA) Partners with Absa Bank Kenya and Visa to Introduce Enhanced Corporate Card Solutions.

28th March 2024

By: Bryan Obala

Membership & Communications, KATA

In a groundbreaking collaboration, Absa Bank Kenya, in conjunction with Visa, has unveiled the Visa Commercial Choice Programme, a pioneering Corporate Card solution aimed at members affiliated with the Kenya Association of Travel Agents (KATA). This innovative initiative promises a myriad of benefits including enhanced automation, flexibility, and improved cash flow management for travel agents across the country.

From left: Dr. Joseph Kithitu, KATA Chairman; Moses Muthui, Consumer Banking Director, Absa Bank; James Kabuthi, Head of Products and Solutions, East Africa, Visa

Under this strategic partnership, travel agents under KATA, representing a formidable network of over 300 travel agencies, stand to gain from streamlined payment solutions tailored specifically for business to business (B2B) transactions. These solutions are geared towards fostering efficient working capital management, operational effectiveness, and improved supplier relationships.

The Visa Commercial Choice Travel Programme, freshly introduced by Absa Bank, offers a plethora of advantages for travel agents within KATA. Notably, agents now have the option to conduct transactions in Kenyan Shillings or US Dollars, empowering them to effectively manage cash flows and optimize working capital. Furthermore, members can leverage the Visa Commercial Pay Virtual Card Platform to automate booking processes and access cutting-edge tools for data management and reconciliation, complete with an intuitive reporting feature for seamless monitoring.

In addition to the tailored Corporate Card solution, Absa Bank is also rolling out a revamped Absa Corporate Visa Card, equipped with enhanced features and flexibility to address the diverse needs of businesses. Through this card and the innovative Visa Commercial Pay Virtual Card Platform, businesses can exercise greater control over employee-initiated expenses and payments, thereby enhancing visibility and operational efficiency.

Commenting on the collaboration, Moses Muthui, Consumer Banking Director at Absa Bank, expressed enthusiasm, stating, “The collaboration between Absa Bank Kenya, Visa, and the Kenya Association of Travel Agents marks a significant milestone in our efforts to empower businesses and accelerate digital inclusion in this space with smarter and integrated payment solutions.”

Eva Ngigi-Sarwari, Visa Kenya Country Manager, echoed similar sentiments, highlighting the partnership’s commitment to innovation and service excellence. She emphasized, “By combining Visa’s global reach and advanced technology with Absa’s deep local market expertise, we are confident that this new payment solution will significantly enhance the way travel agents manage their transactions, providing them with a seamless, efficient and secure experience.”

Nicanor Sabula, CEO of KATA, lauded the collaboration, affirming its importance in catering to the specific needs of members and underscoring the commitment to industry-focused financial solutions.

From left: Dr. Joseph Kithitu, KATA Chairman; Moses Muthui, Consumer Banking Director, Absa Bank; James Kabuthi, Head of Products and Solutions, East Africa, Visa at the Launch of the Corporate Cards for Travel Agents

The Absa Corporate Visa Card offers a range of features including virtual and physical card options, granting customers the flexibility to adapt to various payment scenarios. Furthermore, it integrates seamlessly with Visa Commercial Pay, facilitating hassle-free payments to travel suppliers such as airlines and hotels while streamlining reconciliation processes.

With the launch of the Absa Corporate Visa Card, Absa Bank Kenya reiterates its dedication to innovation and excellence in client service. Leveraging cutting-edge technology and strategic partnerships, the bank continues to deliver solutions that resonate with the evolving needs of businesses in Kenya and beyond.

Sabre 2023 Data Breach Investigations Report.

The travel business today is facing an increased risk to their online security with a rise in cybercrime and phishing attacks. In addition, MFA is required for PCI DSS 4.0 and ISO 27001, SOC2 compliance. With the growing number of Industry standards that are required to mitigate risk, a robust approach to system security is critical.

How will Sabre Identify help you?

With an easy use of MobilePASS+ app you will be able to apply a one-time-passcode (OTP) to add an additional level of security to your Sabre access. This means that besides the usual Sabre credentials (EPR-PCC-Passcode) you will be prompted to input an OTP at sign-in to SRW360 or any Sabre secure sites (i.e.: Sabre Central).

This additional security will protect you from bad actor activities, preventing anyone that is able to gather your Sabre credentials to access the system without your authorization.

Product features

Sabre Identify works in conjunctions with MobilePASS+ applications, which may be downloaded in your device of choice. Once you request using Sabre Identify, you will receive instructions for easy download and enrollment for your user. Sabre Identify will mitigate unauthorized access, as even if someone is able to gather your credentials, accessing Sabre or Sabre secure sites will be limited to the access to your unique One-Time-Password.

To learn about Sabre Identify visit : Sabre or  contact marketing@sabron.com

Dubai hospitality sector sets the pace for growth.

The year 2024 will see the opening of 31 new hotels in Dubai, while 2025 is expected to add 16 new hotels to the mix. This translates to a cumulative total of 851 by the end of 2024 and 867 by the end of 2025, a new report from Cavendish Maxwell says.

The emirate kick-started the year with the openings of ‘One & Only One Za’abeel’ (370 keys – Luxury), the ‘Mercure Dubai Deira’ (152 keys – Upper Midscale), and ‘The Lana Dubai Dorchester Collection’ (225 keys – Luxury).

Despite global conflicts and recent regional unrest, Dubai’s economy, driven by key sectors, such as tourism, remained steadfast in its recovery, the report said.

In 2023, the city welcomed 17.15 million overnight visitors, surpassing its previous high of 16.73 million in 2019 and the 14.36 million recorded in 2022.

Moreover, the tourism sector’s GDP contribution is expected to have nearly doubled this year from 2021 to 36.1%, and is forecasted to reach 2019 levels once again, by 2024.

To continue driving the upward trajectory of tourism in the country, the UAE has set ambitious goals in its National Tourism Strategy 2031, aiming to position itself as a top global destination by 2031.

The strategy aims to boost the tourism sector’s contribution to GDP by AED 450 billion ($122 billion), attract investments worth AED 100 billion, and welcome 40 million hotel guests annually by 2031. It also naturally plays into the Dubai Economic Agenda – D33.

In early 2023, the Dubai government unveiled its D33 Economic Agenda, with the goal of doubling the city’s economy within the next decade and solidifying its position among the top three global cities for travel and business. The tools underpinning this initiative are increasing foreign trade and foreign direct investment.

Dubai Tourism’s recent performance and future ambitions have been recognised globally, with the city being ranked as the No 1 global destination in the TripAdvisor Travellers’ Choice Awards 2024 for the third consecutive year.

Additionally, Dubai has been ranked first regionally and sixth globally as the best city in the world in the World’s Best Cities Report 2024. These accolades underscore Dubai’s commitment to tourism excellence and its status as a top global destination.

The growth recorded by Dubai Tourism in 2023 has certainly played an essential role in giving the city’s hospitality and real estate sectors a solid boost.

Dubai’s Airports

All air traffic in and out of Dubai is managed by two international airports: Dubai International Airport (DXB) and Al Maktoum International Airport (DWC).

In 2023, DXB surpassed pre-pandemic levels of passenger traffic, handling 86.9 million passengers. Forecasts suggest that by the end of 2024, this number could reach an estimated 88.8 million, nearing the record high of 89.1 million set in 2018.

Tourism Demand in Dubai

Dubai’s appeal as a tourist destination has been steadily increasing. In 2022, the city welcomed 14.36 million international overnight visitors, marking a 97% increase from 2021 and reaching 86% of pre-pandemic levels.

This upward trend continued into 2023, with 17.15 million visitors, a 19.4% year-on-year increase.

Source Markets for Dubai Tourism

In Q3 2023, India remained the largest source market for overnight visitors in Dubai, accounting for 14% of the total, followed by Saudi Arabia, the UK, and Russia, each at 7%.

Among the top ten source markets, China saw a 304.4% year-on-year increase, followed by Russia at 77.5% and Germany at 49.6%.

Notably, Saudi Arabia and Oman experienced drops in visitor numbers by 5.6% and 24.9%, respectively.

The Supply Side

Keeping up with the rise in tourism levels in Dubai, the hospitality industry has successfully adjusted supply to cater to increased demand. By the first half of 2023, the total number of hospitality establishments in Dubai had risen to 813, with 148,711 keys. Towards the end of the year, the total number of establishments stood at 820, with 149,685 keys ready to welcome guests.

Evolution in Keys

The number of hotel rooms saw a significant increase in 2021, with the largest growth during the recovery period at 8.7%.

Momentum continued in 2022 with a 6.2% increase, reaching a total of 146,996 rooms.

In 2023, there was a more modest increase of 2.2%, bringing the total room inventory to 149,685 rooms.

Room Supply by Hotel Type

Luxury hotel apartments saw the highest room supply increase yearon-year in 2023, soaring by 5.6%. 5 Star hotels experienced a 4.5% growth, while 4 Star hotels recorded a moderate 1.8% increase.

As of 2023, 67% of the current room supply falls within the Luxury, Upper Upscale, and Upscale classes, while the Upper Midscale and Midscale segments account for approximately one-third (27%) of the total inventory.

During the year, approximately 73% of the new supply was in the Luxury and Upper Upscale segments.

Openings in 2023 included Atlantis The Royal, the Cheval Maison, NH Collection Dubai the Palm, and the voco Dubai, The Palm. The Palm contributed approximately 1,600 new rooms to the current supply increase.

In 2024 luxury supply is expected to experience the most significant growth with 12 new openings planned, adding approximately 3,000 rooms.

Mapping Future Supply

Our estimates suggest that 2024 will see the opening of 31 new hotels in Dubai, while 2025 is expected to add 16 new hotels to the mix. This translates to a cumulative total of 851 by the end of 2024 and 867 by the end of 2025.

An important caveat to note is that the 2024 figures do not include projects that have already opened, such as the ‘One & Only One Za’abeel’ (370 keys – Luxury), the ‘Mercure Dubai Deira’ (152 keys – Upper Midscale), and ‘The Lana Dubai Dorchester Collection’ (225 keys – Luxury).

Market Performance

In 2022, occupancy rates at 73% nearly reached pre-pandemic levels at 75%. Dubai nearly reached pre-pandemic levels.

By the end of 2023, Dubai’s hospitality market achieved an outstanding average occupancy of approximately 77%, surpassing pre-pandemic levels for the first time.

Occupancy levels across Dubai increased by 6.4% year-on-year, with the Upscale and Upper Upscale segments noting the largest increases of 7.6% and 6.5% respectively. The Dubai Luxury sector saw an increase of 4.5% compared to 2022.

Average Daily Rate

In contrast to occupancy, 2023 saw market-wide ADR levels stagnating, recording only a minor increase of less than half a percent year-on-year. This is despite Dubai hosting the biannual AirShow as well as the one-off COP28 in November 2023.

The overall market ADR stood at approximately AED 700.

Breaking it down further, the Luxury and the Upper-Upscale segments saw ADR levels dropping by 1.4% and 0.4% respectively, whereas the Upscale and Upper-Midscale hotels experienced increases in ADRs of 5.3% and 3.6% respectively.

ADRs in Dubai saw a compounded annual average growth rate of 5.85% in the period 2018 – 2023.

A Look at Other Emirates – Occupancy 2023

Economic momentum carried forward from 2022 and 2023 saw a surge in demand-driven performance across the Emirates. All Emirates recorded an upswing in occupancy with figures well above the 70% mark. Abu Dhabi Resorts and Sharjah were the exception, achieving just below the benchmark.

RAK recorded the highest level of increase year-on-year of about 20%, with average occupancy reaching 74% (up from 61% in 2022) and surpassing pre-pandemic 2019 levels at 72%.

As per the RAK Tourism Development Authority (Raktda), the Emirate welcomed a record 1.2 million arrivals (+7.8%) and recorded 4.35 million guest nights (+23.2%).

Average Daily Rate by Emirates – 2023

Abu Dhabi’s hotel market recorded an upward trajectory in 2023 with ADR levels increasing by approximately 16% year-on-year.

Contrary to increases in occupancy levels across the Emirates, ADRs declined over the same period between 1.3% to 7.4% respectively.

Source: Trade Arabia.

New entry rules hurting Kenya’s tourism – travel agents.

Kenya stands to lose on international visitors despite the government’s visa-free initiative, travel agents have cautioned.

This is as a result of a “tedious” process in the acquisition of the electronic Travel Authorization (eTA), which replaced the visa requirement in January.

Most affected are those initially exempted from obtaining an entry visa, the Kenya Association of Travel Agents (KATA) has said, where there were at least 41 countries whose citizens were allowed to visit Kenya visa-free, including the East African Community member states.

While the government has removed the visa requirement for all, most of the countries that enjoyed visa-free access have been thrown back to the eTA platform, with their citizens required to pay the $30 processing fee.

Industry players are concerned that the eTA introduced fresh costs and paperwork, with travelers also required to share proof of air ticket and hotel booking.

When applying for the eTA, the traveler must provide their arrival and departure dates.

Persons holding previously issued e-visas, including East Africa travel visas are however exempted from the requirement of applying for eTA.

“Countries that were allowed visa-free into the country have been impacted as they have to undergo the tedious process and payment. This is the segment that we must address otherwise we could lose out,” KATA chief executive Nicanor Sabula told the Star.

He spoke on the sideline of the inaugural two-day Kenya Travel Industry Payments Summit in Nairobi, which has brought together industry players, fintechs and other players in the payment landscape, to explore the intersection between payments and the travel industry.

According to KATA, there is a need for the government to simplify the process and reduce the requirements, especially on the paperwork (required online submissions).

“The effect and impact is not what we had anticipated as a market and therefore our call to the government is that can we facilitate and make it easier for people to travel to Kenya. We need to tweak it and lessen the process. Find a mechanism that will make the process easier,” Sabula said.

Tanzania for instance issues visas on arrival with lesser requirements, KATA noted.

The travel agents’ lobby has also raised concerns over the “unpredictable” tax environment in the country, which it says is impacting the industry.

“We sale travel in advance sometimes up to one year early so every time there is a change in the taxation framework, that affects the costs of our products. It means we have to bear that cost or when we pass it to the client, they complain as they feel cheated,” Sabula said.

Meanwhile, the association is pushing for a wider adoption of the latest payment systems including cryptocurrency, to ensure Kenya remains competitive in the fast-changing travel industry.

According to KATA chairman Joseph Kithitu, the industry is witnessing the convergence of technological innovations, changing consumer behaviors, and regulatory shifts that are reshaping the payments landscape not only in Kenya but across the globe.

“From traditional credit cards to a myriad of digital payment options, the expectations of travelers have evolved. We must adapt to these changing dynamics, ensuring that our payment systems meet the evolving needs and expectations of our customers,” Kithitu said.

Source: The Star.  

Kenya’s WRC Safari Rally fuels intra-African Tourism push.

The Kenya Tourism Board (KTB) is seizing the marketing opportunity presented by the upcoming WRC Safari Rally to promote destination Kenya and stimulate travel, especially in the East African region.

KTB Ag. Chief Executive Officer, John Chirchir says that the world-famous motorsport tournament has immense potential for tourism growth and is among the board’s key strategies to boost arrivals from the wider East African region.

This, he noted, goes by the increasing number of tourist arrivals from the neighboring East African countries which now rank among Kenya’s top source markets.

“The upcoming WRC Safari Rally is a prime opportunity to showcase Kenya and the East African region’s unique tourism offerings to motorsports enthusiasts and leisure travelers alike. A source market like Uganda now firmly ranks second to the USA in tourist arrivals to Kenya, having contributed 125,556 visitors in 2023 compared to 87,448 in 2022 – a 43.6% growth,” Chirchir said on March 26.

Chirchir added: “Tanzania and Rwanda also feature prominently among our top ten source markets. We want to further stimulate interest and travel in an important regional bloc for us.”

As part of this integrated experiential marketing campaign, KTB is hosting several motorsports fans from Uganda ahead of the WRC Safari Rally set to roar into action this week.

The 150 motorsports fans drawn from various rally groups among Uganda’s motorsports community would later be treated to a breakfast meet and greet in Naivasha ahead of their curated itineraries that will offer them a glimpse of the country’s diverse tourism offerings.

Chirchir noted that this initiative is aimed at capturing the interests of a well-defined niche market with high potential.

“There is no better way to experience the excitement of the WRC Safari Rally than being part of it. Uganda’s fervor for motorsports extends beyond its borders, influencing the broader African motorsports culture. We want to give the Uganda motorsports fans a first-hand feel of what Kenya has to offer beyond the adrenaline-filled rally tracks,” he said.

Besides marketing the East Africa region as a single tourism circuit, the KTB boss was optimistic about such initiatives in further complementing and boosting intra-Africa travel.

The Safari Rally is slated for March 28-31, KTB will be looking to boost destination visibility and showcase Kenya’s unique tourism offerings to motorsports enthusiasts and leisure travelers alike.

The board in partnership with the Ministry of Sports and the WRC recently hosted top drivers for an excursion trip to the Maasai Mara National Reserve as part of this integrated campaign to immerse key influencers in the quintessential Kenyan safari experience.

Source: Independent.

Lufthansa Sees Strong Demand Between Europe and Southern Africa and Will Continue Expanding.

The Lufthansa Group is ready for significant expansion in Sub-Saharan Africa this year with new routes and additional frequencies to its existing network. The group has witnessed increased post-pandemic demand to and from many African countries, prompting its expansion on the continent.

Last December, Lufthansa appointed René Koinzack as the new Senior Director of Sales for Southern and East Africa, Nigeria, and Equatorial Guinea. This is a new position that was created to oversee activities in those specific regions. While not covering all markets, he oversees about 23 African countries. Simple Flying first caught up with René Koinzack at the recent Board of Airline Representatives of South Africa (BARSA) Summit.

Gearing up for Southern African expansion

The group aims to continue strengthening its presence in Africa while assessing growth potential in the Southern and Eastern regions, as well as in Nigeria. Last year, Lufthansa announced the resumption of direct flights between Munich (MUC) and Johannesburg (JNB) after 19 years. The route will see three weekly flights with the Airbus A350. As such, the group will have up to 33 weekly flights to South Africa.

Lufthansa and its subsidiaries, including Brussels Airlines, SWISS, Discover Airlines, Edelweiss, and Austrian Airlines, serve about 35 African destinations. In addition to the airlines, Lufthansa InTouch, Global Load Control (GLC), Lufthansa Cargo, and other business units run various operations around the continent, with over 1,000 employees in South Africa alone.

Strong demand in Southern and Eastern Africa

According to Koinzack, the resumption of Munich-Johannesburg flights is a testament to the positive trends Lufthansa is witnessing regarding travel to and from South Africa. The group has seen a strong rebound in business and leisure traffic from all over Europe. Last year, South Africa-Europe flights were even more popular, with the Rugby World Cup in France.

The group has also seen strong demand in other Southern African countries like Namibia, which is served by Discover Airlines. After launching five weekly flights from Frankfurt to Windhoek in 2021, this increased last summer to ten weekly departures, including the Frankfurt-Windhoek-Victoria Falls service. René Koinzack said to Simple Flying,

“There is a lot of development in our region. We see a strong interest in travel to Southern Africa from Europe. In South Africa, local demand for flights to Europe is also increasing, which gives us confidence in the market.”

The carrier is witnessing the same trends in East Africa, where it has been expanding its operations over the past years, with Zanzibar, Kilimanjaro, and Mombasa as new destinations. Summer 2024 will also see the resumption of Brussels Airlines flights from Brussels (BRU) to Nairobi (NBO) after about nine years. On June 3, the Belgian carrier will start operating up to six weekly flights on the route, but this will be reduced to four weekly in winter.

With the start of the Nairobi operation, the group will also increase flights to Kigali (KGL), which will be served on a daily basis, from June. Brussels Airlines will be the first and only European carrier operating daily flights to Rwanda. The Lufthansa Group sees a lot of opportunities for further growth in Africa, and apart from the new routes starting this year, it will continue analyzing where to increase frequencies and observing market trends and opportunities.

Partnerships and Corporate Social Responsibility

Last year, Lufthansa also signed codeshare agreements with South African Airways and Airlink to give passengers access to more destinations in South Africa. Similarly, SAA and Airlink customers can easily book long-haul flights to Europe with Lufthansa and SWISS on a single itinerary. These partnerships have been very important for the German and Swiss carriers, as René Koinzack put it,

“Lufthansa Group has a long history of forming partnerships in the industry, so it is great to have these codeshares with Airlink and South African Airways to increase the portfolio for our travelers. While Johannesburg is nice, Southern Africa has a lot of diverse regional locations to offer. We want to grow our network for our customers to make it easier for them to travel, not only from Frankfurt, Zurich, and soon Munich to Johannesburg, but also within South Africa.”

In addition to its flight services, Lufthansa is also supporting several projects around the continent as part of its Corporate Social Responsibility (CSR). Help Alliance, a non-profit organization under the Lufthansa Group, is engaged worldwide in giving young people access to education and enabling them to lead a self-determined life.

The organization has just started a brand-new project, building a Chess school in Lagos, Nigeria, reaching kids living in difficult circumstances with education and support. Help Alliance is running other social projects in Tanzania and South Africa.

Source: Simple Flying.

Kenya Airways Returns to Profit With $80 Million Last Year.

Kenya’s national carrier recorded an operating profit of $80 million (Ksh10.53 billion) in 2023, its first since 2017. The airline saw several operational highlights last year, contributing to its improved performance. However, Kenya Airways still recorded a net loss due to the depreciation of the Kenyan Shilling (Ksh), among other factors.

287% growth in operating profit

The airline’s performance marked a significant milestone in its turnaround strategy as it continues to chart a return to financial sustainability. The $80 million profit recorded last year signifies a 287% growth compared to 2022, when it recorded an operating loss of $42.5 million (Ksh5.6 billion).

The airline managed to increase its revenue by 53%, ending the year at $1.3 billion (Ksh178 billion), primarily driven by increased capacity and higher passenger numbers. Speaking at an investor briefing, Kenya Airways Chairman Michael Joseph said,

“These figures highlight the airline’s remarkable performance over the year and provide encouraging signs of continued recovery within the air transportation sector. They also confirm the operational viability of the airline business and demonstrate that the management’s ongoing efforts to restore profitability are yielding positive results.”

Last year, the company saw total operating costs increase by 37% from $92.5 million (Ksh12.2 billion) in 2022 to $126.7 million (Ksh16.7 billion) in 2023 as it boosted operations to recover from the effects of the COVID-19 pandemic. With the additional capacity, direct operating costs increased by 48%, while fleet costs were lower by 47.5%.

Nonetheless, the Kenyan national carrier remains in the loss territory after recording a pre-tax loss of Ksh 22.86 billion and a net loss of Ksh 22.69 billion. This is a remarkable 40.6% improvement from the previous year, when it recorded a net loss of Ksh 38.26 billion.

Moving forward with the turnaround strategy

Kenya Airways has been battling financial and operational challenges for several years, prompting the Kenyan government to pump more cash into the airline. Its last full-year operating profit came in 2017, when it recorded a profit of $11.3 million (Ksh1.5 billion). The following years were also very challenging, with the pandemic adding to the carrier’s problems.

However, the carrier saw more positive results in 2023 and achieved a few organizational highlights, including the resumption of some pre-pandemic routes, improved on-time performance, and launching an independent frequent flyer program. Kenya Airways Group Managing Director and CEO Allan Kilavuka added,

“During the year, the company’s main focus remained on improving customer experience, operational excellence, and cash conservation. These efforts resulted in the airline improving its On-Time Performance (OTP) to a high of 76% from an average low of 58% at the beginning of the year, ranking it as Africa’s second most efficient airline.”

“Additionally, the introduction of the Asante rewards loyalty program and the revamp of KQ’s website aimed to better appreciate and reward customer loyalty while improving user-friendliness and functionality.”

The airline also increased its revenue by enhancing scheduled operations, passenger charters, partnerships, and cost containment measures. According to Kilavuka, Kenya Airways is now focused on taking advantage of the gains achieved in its turnaround strategy – Project Kifaru. It will work on completing the capital restructuring plan, which aims to reduce the carrier’s financial leverage and increase liquidity to ensure normalized operations.

Kenya Airways operations over the past year

Kenya Airways started 2023 with a fleet of 32 aircraft. While it has not significantly enhanced its fleet, it introduced an Airbus A330 in December to enhance capacity during the peak season. The widebody aircraft is wet-leased from Hi Fly and has mainly been operating flights from Nairobi (NBO) to Dubai (DXB) and Johannesburg (JNB) since early 2024.

Last December, the airline resumed regular scheduled flights to Bangkok (BKK) after a three-year COVID hiatus. It had earlier increased its Nairobi-London service to a record twice daily, as well as boosting its Nairobi-New York schedule. This year, the carrier plans to add four new destinations, with Eldoret and Maputo already launched, as well as increasing frequencies to a number of destinations, including New York, Accra, Freetown, and Paris.

In June 2023, Kenya Airways launched Asante Rewards, its own loyalty program, which has reportedly seen a great response from customers. It previously rewarded frequent flyers through Air France-KLM’s Flying Blue. Additionally, the SkyTeam carrier is moving forward with its partnership strategy, which was largely restored in 2022. Last year, it signed an interline agreement with Emirates and later expanded its codeshare agreement with Delta Air Lines. Within the first quarter of 2024, the Nairobi-based carrier has announced codeshares with Air Europa, Vietnam Airlines, and Virgin Atlantic.

Source:  Simple Flying.