Kenya Airways Marks Remarkable Recovery with 120% Surge in Operating Profit

A picture of Kenya Airways plane flying - Kenya Airways financial performance

Kenya Airways PLC (KQ), the national carrier of Kenya, has showcased a stunning revival by reporting a substantial 120% increase in its operating profit for the fiscal year 2023. This resurgence comes on the heels of a challenging period, with the airline having recorded a loss of Kshs 5 billion in 2022. The latest financial figures, announced during the 2023 Half Year results briefing, reveal that the airline has shifted its trajectory toward profitability, posting an operating profit of Kshs 998 million.

This achievement was underpinned by a series of strategic initiatives aimed at enhancing the overall customer experience, achieving operational excellence, and ensuring prudent cash management. By capitalizing on opportunities in passenger charters and intensifying scheduled operations, Kenya Airways effectively navigated the turbulent aviation landscape.

One of the key contributors to this impressive recovery is the noteworthy growth in the cabin factor, which soared to 76.1%. This was complemented by a substantial 43% surge in passenger numbers, amounting to 2.3 million. Additionally, the Group’s revenue witnessed a remarkable upswing, reaching Kshs 75 billion—a substantial 56% increase compared to the same period the previous year.

Read Also: South African Airways Launches New Codeshare Flights with Lufthansa, Swiss to Follow Soon

The airline’s leadership attributes these accomplishments to a combination of factors, including strategic partnerships with other airlines, the renegotiation of lease rentals, and comprehensive cost-reduction measures. The concerted efforts of management seem to have paid off as Kenya Airways navigated the tumultuous conditions of the aviation industry.

During an investor briefing event, Kenya Airways Chairman Michael Joseph expressed his optimism, stating, “These exceptional figures underscore the airline’s outstanding performance during the period and offer encouraging indications that ongoing recovery and turnaround initiatives are bearing fruit.”

Allan Kilavuka, Kenya Airways Group Managing Director and CEO, emphasized the airline’s progress in multiple domains. “We have enhanced our customer experience at different touchpoints, significantly improved the reliability and availability of our aircraft, and elevated our On-Time Performance (OTP) from a low 58% at the beginning of the year to 77% by the end of June, with a target to exceed 80%.”

Despite these triumphs, Kenya Airways faced headwinds in the form of foreign exchange losses, amounting to Ksh 17 billion on monetary items, loans, and leases. Consequently, the airline reported a loss before tax of Kshs 22 billion. The impact of legacy debt and the devaluation of the Kenyan shilling against major currencies loomed large, impeding the airline’s overall performance.

In response to these challenges, Allan Kilavuka stated, “We are actively collaborating with our stakeholders and the Kenyan government to address the legacy debt issue. The devaluation of the Kenyan shilling, which has depreciated by 14% against the dollar since January, exacerbates our financial situation due to the majority of our transactions being conducted in foreign currencies. This has consequently driven up our overhead costs by 22%.”

Looking toward the future, the International Air Transport Association (IATA) predicts a positive trajectory for the aviation industry. Kenya Airways aims to continue its momentum by implementing turnaround strategies and reinforcing its position in the market.

Allan Kilavuka outlined the airline’s outlook, saying, “Our focus moving forward is on recapitalizing the business to establish Kenya Airways on a solid foundation, ensuring long-term growth. We remain committed to expanding our network and optimizing our fleet to accommodate increased passenger and cargo capacities. Encouragingly, forward bookings for the second half of the year show a promising trend, beginning with a robust summer peak, particularly in July and August, where our load factors are surpassing those of the previous year.”

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Source: Airspace-Africa.

South African Airways Launches New Codeshare Flights with Lufthansa, Swiss to Follow Soon

South African Airways, in collaboration with the Lufthansa Group, has recently unveiled an exciting development for travelers heading to and from southern Africa. A new codeshare agreement between South African Airways and Lufthansa has been established, with Swiss joining the partnership in the near future. This strategic move comes as part of the Star Alliance network, aimed at enhancing the travel experience for passengers.

The highlight of this agreement is the revival of the reciprocal codeshare partnership between Lufthansa and South African Airways, set to commence in August 2023. Travelers can look forward to seamless connections between various destinations, providing greater convenience and flexibility.

Under this partnership, Lufthansa-operated flights will now extend their reach into Johannesburg, opening up two exciting routes: Johannesburg to Cape Town and Johannesburg to Durban. Simultaneously, South African Airways-operated flights will include Johannesburg to Frankfurt, creating an array of options for passengers.

The collaboration marks a pivotal moment in the long-standing relationship between these airlines. Dating back to 1995, the initial codeshare agreement was inked for the Frankfurt to Johannesburg route.

The codeshare agreement also extends to the Star Alliance network, which paves the way for further codeshare partnerships with other members of the Lufthansa Group. As a result, more options for passengers to explore international destinations are on the horizon.

As part of the plans for the near future, Swiss, another key player within the Lufthansa Group, is poised to join this codeshare agreement. This development will expand the network even further, with Zurich-Johannesburg flights expected to be covered.

Source: Airspace Africa  

Delta Air Lines Expands Partnership with Kenya Airways for More Frequent Flier Benefits

Delta Air Lines (DL) has expanded its codeshare partnership with Kenya Airways (KQ) to offer customers of both carriers more frequent flyer rewards, travel options, and seamless connectivity.

Codeshare expansion

The expanded partnership comes as a great benefit for frequent flyers, as Kenya Airways recently launched its Asante Rewards loyalty program. As such, Asante Rewards and Delta’s SkyMiles members can continue to earn miles and enjoy enhanced frequent flyer benefits.

Kenya Airways will include Delta’s code on its non-stop service between Nairobi Jomo Kenyatta (NBO) and New York JFK, effective August 5, to further strengthen their cooperation. As earlier reported, Delta told Simple Flying that it realizes the potential for growth in Africa and is looking to expand its footprint through its partnerships.

This will provide customers with the opportunity to explore more destinations in the airlines’ respective markets, including 31 destinations in Africa and 57 cities in the United States and Canada. Kenya Airways Group CEO Allan Kilavuka said;

“Kenya Airways prides itself in connecting Africa to the World and the World to Africa. The expansion of the codeshare is historic as it not only allows KQ to expand its footprint in the US but is also significant because it provides seamless connectivity on a single ticket for those traveling for business, leisure, or studies in the US while giving seamless connectivity to those visiting Africa through JFK and KQ’s hub at Jomo Kenyatta International Airport (JKIA) in Nairobi.”

The two airlines have been strategic partners for a while, as they are both SkyTeam members. The last significant codeshare expansion came in June 2022, when KQ placed its code on DL flights from New York to Boston, Buffalo, Norfolk, Rochester, and Syracuse. Similarly, DL added its code on KQ’s enhanced frequencies from Nairobi to Accra, Freetown, and Monrovia.

Africa-North America connections

Kenya Airways currently operates daily Boeing 787 Dreamliner flights from NBO to JFK, the only available non-stop connection between East Africa and America. The African carrier is happy to enhance Africa-North America connectivity and offer the KQ product directly through its American partner.

Delta Air Lines has been operating flights to Africa for 17 years, the longest of any active US carrier. It is seeing significant demand and positive post-pandemic trends for travel between North America and Africa. Having conquered the Northern markets, it has identified Africa as a region of importance and potential growth. Delta’s President of International Alain Bellemare said;

“At a time when we are seeing unprecedented demand for travel between North America and Africa, expanding our strategic partnership with Kenya Airways offers our customers more travel options as well as supports our priority to deepen our presence across the African continent.”

Although it does not fly to Nairobi, the legacy carrier operates non-stop flights to five African destinations from two hubs. From New York, it serves Accra daily and Dakar 3x a week with the Boeing 767. From Atlanta Hartsfield-Jackson, it serves Lagos daily with the Airbus A330 and Johannesburg and Cape Town with the A350, on its own code.

Source: Simpleflying

IndiGo airline sets low initial fares on Kenya market entry

Indian low-cost airline IndiGo will start Nairobi-Mumbai flights on Saturday charging an introductory one-way fare of $186 (Sh26,523) for economy-class travel.

The fares are much cheaper than what rivals such as Ethiopian Airlines and Emirates are charging, indicating that the Indian carrier is keen to attract customers on the new route before re-pricing its tickets.

On the Mumbai-Nairobi route, the airline has set a one-way price of $179 (Sh25,525), also on economy.

Return tickets for flights starting from Nairobi will be charged at $359 (Sh51,193).

Return flights emanating from Mumbai will be priced at $365 (Sh52,049).

The Indian carrier’s introductory fares are less than half of what its rivals are currently charging.

A one-way flight this Saturday from Nairobi to Mumbai on Emirates for instance will cost Sh132,135, according to the airline’s booking portal as of Monday.

The Emirates flights have one connection.

While Indigo is expected to raise its fares down the line, it is expected to offer some of the cheapest fares compared to its rivals on the same route.

The Indian carrier said the flights to Nairobi will originate from Chhatrapati Shivaji Maharaj International Airport in Mumbai daily.

The airline, which seeks to capitalize on business and leisure travel between India and Kenya, will deploy an Airbus A320neo on the route. The flight will have 186 economy-class seats.

“We are delighted to announce the launch of direct flights between Mumbai and Nairobi, a significant step towards strengthening the bilateral ties between India and Kenya,” Vinay Malhotra, Head of Global Sales, IndiGo, said in a statement on Monday.

Source: Business Daily Africa

Addis Ababa dangles Ethiopian stake to Eritrea – report

Landlocked Ethiopia may use Ethiopian Airlines (ET, Addis Ababa) as a bargaining chip with reports that Prime Minister Abiy Ahmed is suggesting to sell 30% of the flagship airline to the Eritrean government in exchange for port access for the country, reports the Amharic language Amba online newspaper.

Ethiopian Airlines was not immediately available for comment.

Abiy reportedly made the remarks in a meeting with investors and business people in Addis Ababa recently, but this could not be verified independently.

According to Amba, the prime minister said the Ethiopian government was exploring all options to secure a port for the country through negotiations with Eritrea, Djibouti, and Somaliland. “In the case of Eritrea, the government has proposed to give 30% of Ethiopian Airlines to the Eritrean government in exchange for port access [presumably Massawa],” the report said. Amba Digital said Eritrea had rejected the offer in the first round of talks. The portal said it had verified the information with three people who had attended the meeting.

Abiy also said the government would consider using force to secure a port, but this would be a last resort. “We want to get a port through peaceful means, but if that fails, we will use force,” he was quoted by Addis Insight.

Under Abiy, a peace agreement was forged with Eritrea, and ties between the neighbouring countries were re-established on July 9, 2018, ending hostilities over international borders created when Eritrea gained independence from Ethiopia in 1993. However, Ethiopia sees the lack of a port as a major obstacle to its economic development. It currently relies on Djibouti and Somaliland to import and export goods.

Source: Ch-aviation

FlyNamibia and Airlink make booking easier for travellers

FlyNamibia is partnering with Airlink to promote its flights and services to travel agents worldwide. Through the Global Distribution System (GDS), Airlink has global reach and the ability to display and sell its inventory in many markets.

FlyNamibia will enjoy the same global access through this partnership. Simultaneously, FlyNamibia will launch a new website co-branded with Airlink. This website will be linked directly to the Amadeus Altea reservation portal, making the booking process simpler and more user-friendly.

This partnership will allow FlyNamibia to expand its reach and grow its business. It will also make it easier for travellers to book flights with FlyNamibia.

FlyNamibia CEO, Andre Compion says: “Joining the GDS is a major milestone for our growing airline and it will be a boost for Namibia because it makes our flights, network and schedule visible to customers in parts of the world that, until now, we have been unable to access. It also lets us provide customers with a convenient, user-friendly and seamless booking platform.”

“This is one of the logical progressions we envisaged when Airlink invested in FlyNamibia last September. It will help us strengthen air services within Namibia and support the Namibia Airports Company in positioning Windhoek’s Hosea Kutako International Airport as an alternative SADC region gateway hub.

“By building connectivity and extending FlyNamibia’s reach, we will unlock new markets and efficiencies for Namibia’s business, trade, travel and tourism sectors,” explains Rodger Foster, Airlink CEO and managing director.

Last September Airlink acquired a 40% stake in FlyNamibia in an investment that signaled its confidence and faith in Namibia and its bright economic prospects.

“Namibia’s economic expansion is stimulating demand for travel to and from the country. FlyNamibia’s access to the GDS exponentially enhances and increases our ability to tap into this and open new markets. Whilst we are moving closer and deepening our relationship with Airlink, FlyNamibia will continue to operate its own flights and retain its own unique brand and image.

“This dovetails neatly with Namibia’s Harambee Prosperity Plan II and the National Transport Policy vision for efficient, world-class air transport services,” explains Compion.

Although FlyNamibia’s inventory will be displayed on the GDS, all bookings for flights taking place up to and including 28 August, will be managed on FlyNamibia’s current reservation system.

Reservations for FlyNamibia flights from 29 August onwards will be processed on the GDS with customers able to follow instructions on the website which will be linked to the new booking portal.

FlyNamibia will maintain parallel systems for six weeks to ensure a smooth transition.

Source: Zawya

Kenya Airways re-assesses pan-African alliance with SAA

Kenya Airways (KQ, Nairobi Jomo Kenyatta) is re-assessing its plans for a pan-African alliance with South African Airways (SA, Johannesburg O.R. Tambo) , the critical issue being getting strategic investors, according to The Africa Report.

Asked for clarification, Kenya Airways Group Chief Executive Officer Allan Kilavuka explained to ch-aviation: “It is simply a matter of sequencing events. Making sure we have the priorities of strengthening the anchor airlines before we pull the trigger”.

SAA was not immediately available for comment.

According to The Africa Report, the search for a new strategic partner for Kenya Airways, negotiation terms, an evaluation of the airline, and the amount of capital needed are all factors that could delay the proposed alliance with SAA. The government intends to end Kenya Airways’ reliance on state support by the end of December 2023.

The proposed alliance with SAA has been the brainchild of Kilavuka’s who sees consolidation as the answer to Africa’s fragmented airline industry by exploiting greater economies of scale.

As the anchoring members, Kenya Airways and SAA set an initial target of establishing the structure of a new group holding company by the end of 2023. In November, they signed a Strategic Partnership Framework. Still, both airlines have rejected merger suggestions, saying the partnership would be commercial, involving coordinated networks and schedules around their respective hubs at Nairobi Jomo Kenyatta and Johannesburg O.R. Tambo, code-sharing, combined pricing, and reducing operating costs through bulk aircraft procurement and groundhandling services.

However, the finalisation of the deal depends on how quickly Kenya Airways and SAA can strengthen internally through their respective privatisation efforts. Kenya Airways is restructuring with state loans that must be repaid, while SAA is yet to finalise a three-year semi-privatisation process with preferred strategic equity partner Takatso Aviation.

The deal is currently pending a decision from South Africa’s Competition Tribunal following a hearing on June 20. It was greenlighted by its advisory body, the Competition Commission, on the condition that Takatso’s minority partners, Global Aviation Operations (GE, Johannesburg O.R. Tambo) and Syranix, withdraw from the consortium over antitrust concerns. The minority group agreed to bow out last month after previously having dug in its heels. An international investment bank has been appointed to investigate potential buyers and evaluate SAA’s assets, even though the government plans to sell 51% of SAA for a nominal ZAR51 rand (USD2.84) in exchange for an investment of ZAR3 billion rand (USD167 million) in operational capital. Under the privatisation transaction, the government must cover SAA’s legacy debt, which reportedly still sits at ZAR1.5 billion (USD83.5 million).

Source: Ch-aviation

RwandAir Reveals Plans to Fly Daily to London Heathrow This Winter

RwandAir has announced its plans to almost double the number of flights that it operates between Kigali and London, increasing from four flights a week to a daily rotation. The new schedule will come into operation at the end of October, with the carrier keen to capitalize on extra demand while growing its European footprint.

Daily overnight flights

The services in both directions will operate overnight, with the outbound service departing RwandAir’s Kigali International Airport (KGL) base at 23:35 local time as flight number WB710. This flight will touch down at London Heathrow (LHR) at 06:20 the following morning, after a block time of eight hours and 45 minutes.

Meanwhile, after spending just over 14 hours on the ground, the aircraft will depart London Heathrow as flight number WB711 at 20:30 local time. The return leg is scheduled to be 15 minutes shorter, with its arrival at Kigali International scheduled eight hours and 30 minutes later, at 07:00 local time the following morning.

RwandAir will operate these new daily flights, which commence on October 29th this year, with Airbus A330 aircraft. According to a statement released by the Rwandan flag carrier, these have 30 business class and 244 economy class seats onboard, with the former of these cabins offering passengers lie-flat comfort.

Sub-£600 returns

Perhaps unsurprisingly, RwandAir is the only carrier operating direct flights on the aerial corridor between Kigali and London. Despite this monopoly, passengers will be able to buy return tickets for less than £600, with the airline noting that these “start from £587 [$755] in economy class and £2,199 [$2,827] in business class, including all taxes and charges.” RwandAir CEO Yvonne Makolo stated that: “London is an incredibly important market for RwandAir, so we are incredibly excited to be adding direct daily flights from our home in Kigali to London Heathrow. We know these new daily direct flights will offer customers the convenience and connectivity which they have long asked for, and look forward to welcoming more visitors to Rwanda.”

RwandAir is mainly targeting point-to-point traffic with these flights, noting that they will be ideal “for those looking to see mountain gorillas, experience Rwanda’s majestic scenery or go on a safari in Akagera National Park.” However, the airline has also identified the potential for them to accommodate connecting traffic, and adds that passengers from the UK can transfer to a myriad of destinations via Kigali.

RwandAir has served London for more than six years

It has now been over six years since RwandAir first flew to the British capital, with flights from Kigali to London Gatwick Airport (LGW) via Brussels having commenced in May 2017. Three years later, the success of the route prompted the carrier to switch from Gatwick to Heathrow, and, late last year, the flights became non-stop.

Source: Simpleflying

Nairobi To Become IndiGo’s 27th International Destination

IndiGo has announced non-stop flights to Nairobi, Kenya, as part of its larger international expansion program. After commanding a massive lead in the domestic market, IndiGo has been actively pursuing its goal of overseas expansion. The airline previously announced its intention to expand to several new destinations in Africa and Central Asia, and Nairobi is part of that plan.

Hello, Nairobi!

IndiGo is set to start non-stop flights between Mumbai and Nairobi, which will become the budget carrier’s 27th international and 105th overall destination in the 6E network. The airline has opened the booking for these daily flights on its website, and the new service will begin on August 5th. This will be IndiGo’s first scheduled commercial service to Africa. Vinay Malhotra, Head of Global Sales at IndiGo, commented,

“Kenya is our first destination country in Sub-Saharan Africa and encompasses Savannah, Lakelands, as well as mountain highlands…”

John Chirchir, A.g. CEO Kenya Tourism Board, feels this would be great for the tourism sector of the country and business in general. He added,

“This direct access to Nairobi, Kenya’s capital city and a regional hub for business and travel, will provide leisure tourists, business visitors, and investors with a seamless connection to the destination, in addition to our national carrier, Kenya Airways … Through our joint marketing and sales campaigns, we strive to solidify Kenya’s appeal and attract more Indian travelers to explore its wonders.”

Competition

Africa has traditionally not featured heavily on the network maps of Indian carriers. Passenger demand for non-stop flights to the continent is mainly met by African airlines, but things are changing gradually.

Air India did start a non-stop flight between Ahmedabad and Nairobi as part of its repatriation mission during COVID called the Vande Bharat Mission. The airline now has thrice-weekly service to Nairobi from its Delhi hub.

IndiGo’s direct competition from Mumbai will come from Kenya Airways, which operates two daily services to Nairobi. The airline deploys its Boeing 737 aircraft on the route, offering 16 business and 129 economy class seats. It remains to be seen how IndiGo fares on this route eventually and if it enters any partnerships in the future for the markets in Kenya and Africa.

Big plans

Nairobi is part of IndiGo’s larger plan of international expansion. Earlier this month, the carrier announced the addition of six new destinations across Asia and Africa, connecting destinations such as Nairobi, Jakarta, Tashkent, and Baku, among others, in the coming months.

The carrier is also utilizing its codeshare partnership with Turkish Airlines to offer its passengers convenient connections to the West. It currently provides connections to more than 30 destinations in Europe that offer access to countries including Scotland, Bulgaria, Spain, the Netherlands, Greece, Belgium, Hungary, Denmark, the Republic of Ireland, the United Kingdom, Malta, France, the Czech Republic, Israel, Austria, Switzerland, Italy, and Portugal.

IndiGo has even expanded the codeshare agreement to destinations in the US, allowing access to New York, Boston, Chicago, and Washington via Istanbul, effective June 15th. Currently, IndiGo commands a share of more than 60% of the Indian domestic market and is preparing to bolster its international presence with these new services and codeshare connections.

Source: Simple Flying

Asante Rewards To Offer Status Match To Its Existing Air France-KLM Flying Blue Customers

Kenya Airways’ new loyalty program is hoping to attract its existing Flying Blue members.

It’s been exactly a month since Kenya Airways announced its new loyalty program, Asante Rewards. Simple Flying had the chance to speak to Julius Thairu, Chief Commercial & Product Officer at Kenya Airways, about what the future will look like and the first steps in the public rollout. Membership will be key, and Thairu is hoping some of the airline’s most loyal customers will try out, and stick to, Asante.

Existing members welcome

For nearly two decades, Kenya Airways customers were invited to make their loyalty accounts at Air France-KLM‘s Flying Blue, one of the many agreements under their joint venture. However, as that deal wound down, the carrier decided it was time to regionalize its loyalty scheme and reward members closer to home. But there’s no point in creating all this infrastructure if you can’t get the high spenders over.

Thairu noted that the status match is only available to those who joined Flying Blue through Kenya Airways, so Asante is not competing with the program. Alliances avoid trying to poach members from their own ranks, but since Asante is new, Flying Blue customers have the chance to join two programs at the same elite level.

Thairu emphasized that this offer is only for those who joined through Kenya Airways and have a majority of their flying with the carrier in the region. Notably, these members will be status matched instantly and be given a lower tier threshold to renew their status for the next year as well. You also will not lose your Flying Blue status, the same as any match offer.

Details being sketched out

Asante Rewards is very much in its infancy and is slowly building out its core features, including earning and spending miles with partners. On this, Thairu noted that the program is in close contact with Air France, KLM, and Delta to draw out its first distance-based award charts. This can be a major factor in influencing members to join, with cheaper reward tickets being the best to generate interest.

However, for those living in Kenya or flying with Kenya Airways primarily, Asante promises to provide more regional benefits as one of Africa’s only major loyalty programs. Expect partnerships with local retailers, online portals, and other avenues to increase your mileage balance on a daily basis. While it will be a long road to becoming a full-fledged program, it is promising to see work done toward developing Asante.

To earn status, members can also just fly with Kenya Airways (KQ), with no minimum points needed. Here are the requirements:

  • Silver Elite: 15,000 points or 12 flights on KQ or partners
  • Gold Elite Plus: 30,000 points or 25 flights
  • Platinum Elite Plus: 60,000 points or 50 flights

Asante hasn’t listed out the definition of partners, but it’s likely only flights carrying KQ’s code. While 50 sectors is ambitious, 12 or 25 flights for frequent flyers is quite achievable and perhaps an easy path to unlocking SkyTeam Elite Plus benefits.

Source: Simple Flying