Kenya Airways will resume passenger flights on June 8, the Transport Ministry has confirmed.

On the other hand, the Kenya Airports Authority is putting in place the necessary operation manual ahead of the opening of the country’s airports for passengers.

In an interview with the Star, Transport Cabinet Secretary James Macharia said the airline is ready to take back to the skies.

This will however be subject to “medical protocol”, Macharia said, which the government is keen to ensure both the national carrier and KAA comply with. 

“We expect KQ to fly from June 8 subject to medical protocols,” he said.

According to industry players, these include clearance by the World Health Organization (WHO) and adherence to set specifics and standards by the International Air Transport Association (IATA).

Among them is spacing at check-ins, waiting bays, sanitising  and neutralising of the middle seats in aircraft.

“We are supporting KQ to get back to the skies,” Macharia said.

This week, staff at JKIA were taken through a two-day pandemic preparedness training, a program of the East African Community conducted by AMREF and funded by Germany.

The Sh708.1 million programme covers eight international airports in the six EAC partner States.

It involves a wide range of staff with close contact to passengers and or their luggage, mong them airport medical service providers, aircraft and airline operators, selected crew members, staff at immigration and customs, cargo and baggage handlers. 

The training aims to build the knowledge of the staff on safety measures, surveillance, prevention and control strategies and relevant regional guidelines.

“These trainings are implemented at a critical point in time, before international travel picks up again,”German Deputy Ambassador Thomas Wimmer said.

The latest developments give hope to the country’s aviation and travel industry, which has one of the most affected since the government’s suspension on intentional flights in March to curb the spread of the coronavirus.

The airline grounded a majority of its 36 aircraft, which includes nine Boeing 787 Dreamliners, 10 Boeing 737 aircraft, and 17 Embraers.

 

“We started feeling the effect in February after we stopped flying to China, then Italy and the rest followed,” Kenya Airways CEO Allan Kilavuka told the Star in a recent interview.

KQ, as it is known by its international code, has been competing for cargo business, which is currently the only business available for most airlines.

This is through its two Boeing 737-300 freighters and the use of passenger planes to transport cargo.

KQ has also been flying specially arranged emergency flights, mainly to evacuating citizens stranded abroad, or those seeking to fly back home.

Such is the direct flight from Nairobi to London set for June 4, where subject to sufficient demand, KQ will operate a specially arranged flight which will depart from Nairobi at 9:20 am for London Heathrow. 

The economy class ticket is going for approximately $1,333(Sh142, 710) and $2,403 (about Sh257, 265) for business class. 

Returning to the skies will be a big relief for the airline which has a network of 53 destinations globally.

Kilavuka yesterday said the airline will start with local flights before moving to regional routes and inter-continental schedules.

“We will start with domestic and regional flights at reduced frequency and then introduce some long haul at reduced frequency and changed based on demand,” he told the Star.

KQ has been losing an estimated Sh9.3 billion in revenue monthly after the suspension of flights.

On Tuesday, it announced a net loss of Sh12.9 billion for the financial year ended December 31, 2019, as operating costs dented its balance sheet.

This is 72 per cent rise compared to the Sh7.5 billion net loss reported for the same period in 2018.

Adoption of IFRS 16 and increase in operating costs associated with a 15 per cent increase in capacity deployed to offer increased connectivity between city pairs and investment in new routes affected the airlines profitability, Chairman Michael Joseph said.

The Nairobi Securities Exchange-listed airline saw a 12.4 per cent increase in operating costs, driven by an increase in capacity deployed and an increase in fleet ownership costs attributed to the return of two Boeing 787 aircraft that had been subleased to Oman Air.

The operating costs eroded gains made in revenues which increased by 12.4 per cent to Sh128.3 billion, up from Sh114.2 billion in 2018.

“The growth was due to improved passenger, cargo, ancillaries, and other revenue streams, mainly due to expansion of the Kenya Airways network,” said Joseph.

Kilavuka has however warned of tough times ahead before the industry fully picks, with passenger and revenue numbers expected to drop by 65 per cent

According to the CEO, the propositions to neutralize the middle seat in aircraft will also increase cost of travel by between 50 and 100 per cent.

Airlines in Europe and parts of Asia have commenced operations, albeit on small-scale, as travelers remain cautious. 

Macharia has affirmed government’s support for KQ, which is under the process of nationalization, saying it remains critical for the flower sector, fresh produce exports and the country’s tourism sector.

“KQ goes beyond the balance sheet and profit and losses. If you only look at these, you will never have an airline,” he said on the telephone, “We shall continue supporting KQ.”

 

Source: https://www.the-star.co.ke/business/kenya/2020-05-29-kenya-airways-jkia-gearing-up-to-resume-operations/

The Kenya Association of Travel Agents (KATA) this week hosted Qatar Airways in an Industry Meeting with KATA members in attendance.

The online meeting that was hosted by KATA Chief Executive Officer Agnes Mucuha had on its panel the KATA Chairman Mr. Mohammed Wanyoike and Qatar Airways Country Manager Fadi Zuraikat.

Mr. Zuraikat, during his presentation explained to KATA members that the airline is currently operating over 150 flights per week to over 33 destinations globally.

“In total, by the end of June, we plan to operate 28 flights to 6 destinations in Africa,” he said. Subject to the government’s opening up international flights, Qatar Airways plans to resume one flight to Doha in June which will increase to two in July then three in October 2020.

Qatar Airways further informed members that tickets already bought will have a validity period of two years and can be swapped for miles to be spent at traveller’s convenience.

Tickets will be refunded in case of a cancelled flight and there is also the option for exchanging the ticket for future travel with 10 percent additional value. The ticket can also have its date and destination changed unlimitedly. All this is however for travel booked up to December 31, 2020.

He assured members of the safety of their clients once international travel resumes, saying that the airline has put up measures of international standards that will ensure a clean and secure space for travel infection free.

Mr Wanyoike noted that it is encouraging that airlines have already made plans to actively resume business once travel restrictions are lifted. He pointed out that with the market opening up in the rest of the world, it will also open up in Africa and businesses can resume generating revenue.

“Life has been hard for the travel trade since we shut down our businesses in March and sent our staff home on unpaid leave. This conversation has given our members hope,” he said.

United Federation of Travel Agents Associations (UFTAA), the airlines and International Civil Aviation Organisation (ICAO), he further said, are developing protocols on the minimum standards that need to be enforced to ensure safety of travellers globally.

Once travel resumes, travellers are encouraged to book their travel with a trusted and certified KATA agent to ensure that they are fully appraised of all necessities and requirements for safe travel.

The Portfolio Committee on Tourism and the Select Committee on Trade and Industry, Economic Development, Small Business Development, Tourism, Employment and Labour received a briefing from the South African Tourism (SAT) on their five-year strategic and annual performance plans.    

The report was well received as the committees were reassured by SAT that the target of 21 million tourist arrivals will be met by 2030. The committees welcomed the assurance to achieve that target after COVID-19 as that will be even more difficult given the fact that the entire world has been affected by the pandemic, and the competition for tourists among countries for tourists to their destinations will be tight.  

The committees heard that the SAT would be looking for new markets that were not in their previous marketing plans. The SAT told the committees that one of the tools it will use is digital marketing with a shift of focus from classical to digital marketing of content.  

The Chairperson of the Portfolio Committee on Tourism, Mr Supra Mahumapelo, advised the SAT and the Department of Tourism to develop a strong link with the Department of International Relations and Cooperation for the purposes of partnering with embassies and consulates around the world especially in Africa.  

That, according to Mr Mahumapelo, needs to be developed and be incorporated into the strategic and annual performance plans of the SAT.   Furthermore, Mr Mahumpelo said: “Now is the time to strengthen, reposition and rejuvenate domestic tourism to succeed as the domestic tourism market reopens in December while we wait for the international markets to open in February 2021.”  

 It was agreed in the previous meeting of the committee that the department will release a report in September this year on the transformation of the sector. The committees are looking forward to the tabling of a report that, according to them, must take into account the development of a non-racial and non-sexist tourism sector for the realisation of the dream of a prosperous and harmonious South Africa.  

The committees said, whilst the White Paper on Tourism is being reviewed, the SAT must also look at the grading policy of the establishments and how the unemployed, women, youth and people with disabilities living in villages, townships and small towns can be included in the policy in the context of the district development model.  

The committees have noted the reassurance by Minister Mamaloko Kubayi-Ngubane that the programmes of the department and the SAT include the extensive work of reigniting and developing tourism heritage routes that are inclusive of museums in rural areas and small towns.   The SAT is also urged to endeavour to find mechanisms to increase the number of establishments that are members of Tourism Marketing Levy South Africa (TOMSA).

The committees told the SAT that this is necessary to strengthen the voice of the collective that contribute to the TOMSA levy which contributes 10% towards the budget of the SAT. The committees welcomed the announcement by Minister Kubayi-Ngubane that the establishments that are willing to operate in the travel business can apply directly through the Department’s website and the turnaround time to issue permits for business travel is 24 hours.

Distributed by APO Group on behalf of Republic of South Africa: The Parliament.

Source: https://www.cnbcafrica.com/africa-press-office/2020/05/28/coronavirus-south-africa-committees-on-tourism-put-transformation-high-on-the-agenda-of-the-south-african-tourism/

 

A legal framework for the nationalization of Kenya Airways is set for discussion when Parliament resumes next week in what could change stakes for key shareholders that include a consortium of local banks and Royal Dutch Airlines.

Parliamentary Transport Committee has come up with the National Aviation Management Bill 2020 that seeks to guide implementation of its earlier report that recommended State’s takeover of the national carrier.

Under the plan, the government, which owns 48.9 percent of KQ, is expected to buy out the remaining holders of 51.1 percent of the shares, and form Aviation Holding Company to run the national carrier and Kenya Airports Authority (KAA).

The Cabinet has approved the National Aviation Management Bill, which is currently at the State Law Office for refinement before being brought to Parliament.

Transport Committee chairman David Pkosing said his team would push the Bill through all stages by August.

“My committee is focused, and on course to deliver KQ and KAA merger now that the Bill to actualise the recommendations in our report is on its way to Parliament after it was approved by the Cabinet,” he said.

“As a committee, we want to deliver the Bill by August. We are committed to ensuring that the airline receives the necessary support and reclaim its lost glory. This is a critical Jubilee agenda to rescue our aviation in the post-Covid-19 pandemic.”

Last week, Treasury secretary Ukur Yatani was reluctant to grant KQ its request for a Sh7 billion emergency bailout, saying the State was keen on a long-term rescue plan.

Mr Pkosing said yesterday his committee’s report alone was not enough to deliver the merger between KQ and KAA hence the need to introduce the National Aviation Management Bill in Parliament next week.

“Some of the recommendations made by the committee in the report require legal backing, which cannot be achieved through a report. That is why we have come up with a Bill to steer the process to the end,” he said.

In their report adopted by the house last year, the committee recommended tax exemptions for the National Aviation Company as a way of saving the dwindling fortunes of the national carrier.

The report had also recommended that the KAA, Jomo Kenyatta International Airport and Kenya Airways to be put under Kenya Aviation Holding Group.

Source: https://www.businessdailyafrica.com/economy/Legal-framework-for-KQ-takeover-out-by-August/3946234-5564554-yd2g4bz/index.html

 

An IATA analysis revealed that the airline industry’s global debt could rise by almost $120 billion to $550 billion by year-end.

• $67 billion of the new debt is composed of government loans ($50 billion), deferred taxes ($5 billion), and loan guarantees ($12 billion).
• $52 billion is from commercial sources including commercial loans ($23 billion), capital market debt ($18 billion), debt from new operating leases ($5 billion), and accessing existing credit facilities ($6 billion). 

“Government aid is helping to keep the industry afloat. The next challenge will be preventing airlines from sinking under the burden of debt that the aid is creating,” said Alexandre de Juniac, IATA’s Director General and CEO.

In total governments have committed to $123 billion in financial aid to airlines. Of this, $67 billion will need to be repaid. The balance largely consists of wage subsidies ($34.8 billion), equity financing ($11.5 billion), and tax relief / subsidies ($9.7 billion).

“Over half the relief provided by governments creates new liabilities,” said de Juniac. “Less than 10% will add to airline equity. It changes the financial picture of the industry completely. Paying off the debt owed governments and private lenders will mean that the crisis will last a lot longer than the time it takes for passenger demand to recover.”

Moreover, the amount of relief received by airlines differs markedly from region to region. The US CARES Act is the main component of financial aid to North American carriers and represents a quarter of 2019 annual revenues for the region’s airlines. European assistance is at 15% of 2019 annual revenues and Asia-Pacific at 10%. But in Africa, the Middle East, and Latin America average aid is around 1% of 2019 revenues.

IATA is urging governments still contemplating financial relief to focus on measures that help airlines raise equity financing. “For those governments that have not yet acted, the message is that helping airlines raise equity levels with a focus on grants and subsidies will place them in a stronger position for the recovery,” said de Juniac.

“A tough future is ahead of us,” he continued. “Containing COVID-19 and surviving the financial shock is just the first hurdle. Post-pandemic control measures will make operations more costly. Fixed costs will have to be spread over fewer travelers. And investments will be needed to meet our environmental targets. On top of all that, airlines will need to repay massively increased debts arising from the financial relief. After surviving the crisis, recovering to financial health will be the next challenge for many airlines.”

Source: https://www.airlines.iata.org/news/airline-debt-threatens-recovery

 

Owners of The Fairmont Norfolk, an iconic hotel in Nairobi, announced Wednesday that it is closing its doors indefinitely and will fire all employees over the impact of coronavirus pandemic on the business.

In a memo to staff dated May 27, the country manager Mehdi Morad said owing to the uncertainty of the direction the global pandemic will take, they have been forced to terminate employee contracts and close their properties.

The Fairmont Hotels and Resorts said they are going to close Fairmont The Norfolk and Fairmont Mara Safari Cub as a result of “spiral effect of the COVID-19 pandemic and the recent flooding of Fairmont Mara Safari Club”.

“Due to the uncertainty of when and how the impact of the global Pandemic will result in the business picking up in the near future, we are left with no option but to close down the business indefinitely,” Mr Morad said in the memo.

“It is therefore the decision of the management to terminate the Services of all its employees due to “frustration” by way of mutual separation and taking into account the loyalty and dedication the employees have put into the success of our company in the previous years.”

Employees will receive their termination letters by June 5.

Fairmont joins a growing list of hotels that have closed or suspended operation due to effects of coronavirus.

Most five-star hotels rely on tourism, events and conferences which have since dried up.

In March, Nairobi’s Tribe Hotel, Ole Sereni and DusitD2 stopped operations days after the government-imposed travel restrictions and social distancing rules to curb the spread of the coronavirus.

Other high-end hotels followed suit to cut costs as the pandemic drags on.

Restrictions on foreigners coming into Kenya have delivered a big hit to the country’s tourism industry, which brought in Sh163.56 billion last year.

Most hotels have reported occupancy rates of well below 10 percent against 75 percent normally.

Source: https://beta.nation.co.ke/dailynation/business/norfolk-closes-indefinitely-fires-all-employees-308322

Europe is starting to lift coronavirus travel restrictions, but these are not enough for Air Canada to resume international flights.

Iceland will open its borders from June 15 and Greece from July 1, but it was Italy’s lifting from June 3 that prompted a question to Air Canada CFO Michael Rousseau about launching flights.

“We need to make sure that both countries – Canada and Italy – are open for international travel to make a strong business case for travel,” Rousseau told the Wolfe Global Transportation Conference.

Europe may be opening, but Canada is not. Canadian citizens and residents returning home still have to follow a 14-day quarantine upon their return to Canada.

“We want to make sure that Canadians can go there and when they come back, they don’t have to self-quarantine,” Rousseau said.

Foreign visitors are not allowed in. That precludes Air Canada from carrying two-way traffic and instead makes it dependent only on outbound Canada travel. If Canada does allow visitors, demand is expected to be low if they have to quarantine upon arrival.

“We certainly want to ensure that any family or friends coming from Italy don’t have to self-quarantine when they come to Canada,” Rousseau explained.

Canada’s international, non-U.S., travel restrictions are scheduled through June 30 but chief public health officer Dr. Theresa Tam tapered expectations the quarantine requirement would end.

“The mandatory 14-day quarantining of people who come in remains a cornerstone as we go forwards,” Dr. Tam said.

Rousseau said restrictions at home and abroad would shape Air Canada’s return to any international country. “Those rules have to be identified and understood before we have bilateral traffic,” he said.

Air Canada expects international flying to resume on its mainline brand and not Rouge, which will see a substantial reduction of its fleet. Exiting are all of Rouge’s 767s, the only aircraft it had to fly to Europe.

Rousseau expects Rouge could resume later in the year so it could offer winter flights to the Caribbean and other sun destinations.

Rousseau hopes to preserve traffic by instead routing it through Air Canada and a partner airline’s hub.

Air Canada will conservatively add flights and evaluate growth rather than offer too many flights right away. “We can always fill in with capacity as we see the demand build,” Rousseau said.

Source: https://www.forbes.com/sites/willhorton1/2020/05/21/europe-lifts-travel-restrictions-but-air-canada-waits-to-resume-international-flights-during-covid-19/amp/

 

The Kenya Association of Travel Agents held the first industry meeting this year on May 20, 2020. The meeting was held online due to the social distancing conditions occasioned by the Coronavirus pandemic that has wreaked havoc on the industry since March 2020 when the first case was announced in Kenya.

KATA Chairman Mr. Mohammed Wanyoike welcomed the members to the meeting. He pointed out how the pandemic has devastated the travel and tourism industries both locally and globally. Members were informed that the board has had several engagements with the Tourism and Wildlife Cabinet Secretary Najib Balala through various forums to discuss the effects and mitigation measures of the pandemic in the industry.

Members were also asked to use the labour advisory as advised by KATA on making decisions on staffing based on their individual situations. Mr Wanyoike pointed out that the largest resource in the industry is labour and this has been affected as businesses are not conducting any business leading to releasing staff on unpaid leave or offering pay cuts until the end of the pandemic.

Ms Mucuha during a presentation pointed out that the effects of COVID-19 have been felt locally and globally with recently released information from International Civil Aviation Organisation (ICAO) revealing that airline sales available for sale in Africa have gone down to 38 percent down from 71 percent reduction due to low business.

Travel agents extensively discussed ways of business recovery coming up with strategies that will see to business continuity for travel agents post COVID-19.

Emirates has announced its plan to operate scheduled flight services from 21 May to nine destinations: London Heathrow Frankfurt, Paris, Milan, Madrid, Chicago, Toronto, Sydney and Melbourne. The airline will also offer connections in Dubai for customers travelling between the UK and Australia.

Travellers will only be accepted on these flights if they comply with the eligibility and entry criteria requirements of their destination countries. This includes an approval from the Federal Authority for Identity and Citizenship (ICA) for UAE residents who wish to return to Dubai.

Adel Al Redha, Emirates’ Chief Operating Officer said: “We are pleased to resume scheduled passenger services to these destinations, providing more options for customers to travel from the UAE to these cities, and also between the UK and Australia. We are working closely with the authorities to plan the resumption of operations to additional destinations. We have implemented additional measures at the airport in coordination with the relevant authorities in respect to social distancing and sanitization. The safety and wellbeing of our employees, customers and communities, remain our top priority.”

In addition to the scheduled services, Emirates will also continue to work closely with embassies and consulates to facilitate repatriation flights for visitors and residents wishing to return home. This week, the airline plans to operate flights from Dubai to Tokyo Narita (15 May), Conakry (16 May), and Dakar (16 May).