Kenya’s travel industry says its earnings have dropped by Sh3 billion or six percent of last year’s revenue as holidaymakers continue to cancel their plans over coronavirus fears.

Kenya Association of Travel Agents chairman Mohammed Wanyoike said if the hotel and flight cancellations persist, the loss could hit 10 per cent of last year’s revenue of Sh51 billion by end of the month.

“We have already quantified that cancellation of travels in February has resulted in a six per cent decline in revenues,” he said.

“The majority of the cancellations comes from the Asian countries that have been hugely affected”.

On Tuesday, Kenya’s Coronavirus National Emergency Response Committee halted flights from Italy’s northern cities of Verona and Milan, which have direct flights to Mombasa.

“This part of Italy is currently experiencing coronavirus incidents, which could affect the safety of Kenyans,” the team said in a statement.

The committee has also banned flights between Kenya and Iran.

A global update shows that the virus has so far affected 90,893 people and killed 3,110 in more than 77 countries.

Mr Wanyoike said the industry expects its losses to rise up to the end of the first quarter when the virus is expected to thaw. He reckoned the decline in bookings would hit their operations, “but we don’t foresee redundancies as things are expected to improve in the second quarter of 2020.”

“To mitigate the problem, we are encouraging our members to be alert and to be on top of the game in terms of knowing where the numbers are going.

“Some of the consideration that may happen towards the end of this quarter is if you find your labour operating on 50 per cent capacity we might consider asking them to take normal leave and then they resume when the business is back to normal,” he said.

Source: https://www.businessdailyafrica.com/economy/Virus-fears-cost-travel-industry-billions/3946234-5478594-xpve90z/index.html

The Kenya Association of Travel Agents has congratulated the newly confirmed Kenya Airways Chief Executive Officer, Mr. Allan Kilavuka.

KATA through the Chief Executive Officer Ms. Agnes Mucuha lauded Mr Kilavuka who has held the position in an acting capacity since January 2020. He is also the current CEO of the airline’s low-cost subsidiary Jambojet.

The new CEO’s term takes effect from April 1, 2020. He has held the acting position in an acting capacity after the resignation of Mr Sebastian Mikosz.

While announcing his resignation in June 2019, Mr Miskosz who also served as the Group Managing Director said in a memo to the Kenya Airways staff that was to resign at the end of 2019 due to personal reasons.

Ms Mucuha noted that over the years KATA has worked hand in hand with the airline to ensure mutual benefits for the travel agents and the airline.

“We were already working together in his acting capacity and we look forward to enhanced engagements. Kenya Airways and KATA have had a longstanding partnership and we will continue working together to boost the travel industry,” she said.

While making the announcement, Kenya Airways Chairman Michael Joseph noted that Mr Kilavuka, in his acting capacity took on the role with energy as he maintained his position as Jambojet CEO at the same time.

“It is particularly gratifying to me that the Board agreed to support the appointment of Allan to the full role of substantive CEO. During his short time as acting CEO of KQ, Allan has thrown all his energy into this role, whilst still maintaining his position of CEO Jambojet,” Mr. Joseph stated.

The new CEO will join the boards of all subsidiary companies and will remain on the Board of Jambojetinitially as CEO until March 31, 2020 and thereafter as a representative of Kenya Airways.

Low Cost Carrier Fly 540 has announced flight delays after one of their aircrafts made an emergency landing on February 28, 2020 at 9.45 am.

The aircraft registered 5Y-CGH made an emergency landing at Kapese Airstrip in Turkana South after developing mechanical problems.

“At 9.45 am, FLY 540s DASH8 300 aircraft had a suspected foreign object strike which led to engine failure,” the airline said in a statement.

The statement further read that the Captain then declared an emergency and landed safely. There were no injuries as all the 49 passengers and 5 crew members on the flight disembarked safely.

The airline further stated that the incident will therefore lead to delays in scheduled flights and asked their passengers to be patient as the matter is resolved.

The aircraft was on its way to Wilson Airport, Nairobi from Lodwar when the incident happened.

Travelport has achieved level 4 NDC certification as an aggregator from IATA. This certification confirms Travelport is able to provide full offer and order management and servicing of an NDC booking, complementing the current capabilities of voiding tickets and cancellations with new capabilities to modify and exchange tickets as well as processing refunds. 

This end-to-end booking management capability is a crucial part of the day to day travel management that Travelport’s customers rely on.

Travelport has been offering NDC content from a small number of partner airlines since October 2018 and has taken a phased approach to its NDC roll out plans in order to build an NDC solution which works for all parts of the interconnected travel industry. 

Commenting on the certification, Jason Clarke, Chief Commercial Officer, Travel Partners said: “Delivering NDC content to our customers is a crucial part of Travelport’s multi-source content strategy and this certification is the next step in recognizing our NDC capability. Managing complex itineraries for their travelers, including changes and disruptions, is a core part of the role of our travel agency customers so this functionality is important in bringing NDC to life for the whole industry.” 

Travelport is working with a number of IATA NDC Leaderboard airlines on their content distribution strategies in a production environment and with a wide range of travel agencies, online travel agencies and travel management companies to ensure its multi-source content strategy, of which NDC distribution is a part, meets the needs of the whole, global travel industry. 

The next meeting of the Travelport NDC Leadership Council will take place in Q2 2020.

Travelport

Alex Lynn

How will travel technology evolve in the coming months? Technology brand Travelport has a few ideas. Travelport conducted research with the help of surveyed travel professionals, travelers and travel brands to offer the following insights.

Travelers continue to want digital self-service options and communication. Travelport found 55 percent of travelers prefer to learn of travel disruptions, for example, via digital communications versus speaking with someone directly. This was particularly true for Generation Z and business travelers.

Travelers will still want to use apps during their travels, but they want those apps to do more for them, versus having to use a range of apps to get through their day. Travelport references the “super apps” becoming more popular in Southeast Asia, such as WeChat, Grab and Go-Jek. These and similar apps provide travelers with one place to book travel, bank, shop, communicate, find a date, order food delivery and pay on the go.

Lastly, Travelport expects the way travel is retailed and purchased online to grow significantly, with more offerings than ever before.

“These insights into the forces which will shape travel experiences as we start a new decade show we’re seeing rapid change in content retailing particularly online and an evolution of mobile travel as we all increasingly depend on our devices to help us navigate the world. It’s clear to see customers are driving change across the travel industry with new topics, such as the environmental impact of travel and when an agency could successfully employ a ‘bot’ show the 2020s will be another era of rapid change for travel,” said Fiona Shanley, chief customer and marketing officer, Travelport.

Our Source: https://www.trazeetravel.com/upcoming-technology-travel-trends/

The government has now extended the deadline for phasing out of the old ordinary passports by one more year until March 1, 2021.

The old passports were originally supposed to be phased out by August 31, 2019, but the deadline was extended to March 1, 2020 before now being pushed to next year.

Interior Cabinet Secretary Fred Matiang’i, in a statement released on Monday, said the new extension is due to the fact that approximately 1.8 million Kenyans, especially those living in the diaspora, are yet to migrate to the new generation e-passports.

“…the government hereby extends the deadline for voiding the current dark blue machine-readable passport by 12 months. As such, its holders may continue using it until March 1, 2021 when it will no longer be valid for travelling,” said the CS.

“Considering this is the second extension, the 1.8 million Kenyans still holding the dark blue passport are urged to take full advantage of this period to acquire the EAC-format electronic passports at the earliest opportunity possible, to avoid last minute rush, unnecessary jam-ups at the centres, and travelling inconveniences.”

According to CS Matiang’i, same-day issuance of passports is also in the pipeline and is expected to be achieved by July 1 this year.

The CS also announced that, to faster facilitate this process of migration, the government has since set up four more new passport control centres in various towns in the country; Nakuru, Kisii, Eldoret and Embu.

Six more centres have been set up in the diaspora; three in Europe (Berlin, Paris and London), one in the U.S. (Washington DC), another in Johannesburg, South Africa, and one more in Dubai.

Our Source: https://citizentv.co.ke/news/govt-extends-deadline-for-migration-to-e-passport-to-2021-323968/

Kenya Airways (KQ) has lost $8 million in revenue in about one month since it suspended flights to China as a precaution against the deadly coronavirus outbreak.

The losses on the Nairobi-Guangzhou route include foregone passenger and cargo revenue.

Acting chief executive Allan Kilavuka told The EastAfrican that China is a key cargo origin as well as a main feeder to the regional freighters, and the suspension of flights since the end of January has dealt a big blow to the airline’s revenues.

“We are looking at lost revenue of about $8 million, both passenger and cargo. However, various initiatives are in place to increase passenger and cargo revenues on other routes to minimise this impact,” said Mr Kilavuka.

The coronavirus has so far infected more than 75,000 people globally and killed over 2,200.

“I am optimistic that the situation in China will be under control soon and we will resume our service that continues to create convenience and a good flying experience for all our guests,” he added.

He said that KQ switched the aircraft that operated the route to China, to Dubai, from February 11, and changed the timing of the Bangkok flight from a midnight departure to early morning as a way of maintaining operational efficiency and minimising disruption to passengers.

“Due to our additional precautionary measures we have faced some delays in operations. We are working closely with the port health teams from the Ministry of Health as guided by the World Health Organisation who continue to monitor and advice on the next steps to take with regards to the coronavirus,” he said.

KQ’s stock on the NSE has fallen by 1.29 per cent over the past month to trade as low as Ksh2.29 ($0.022) per share on Thursday last week.

In the past seven years, the share price has dropped by over 75 per cent from a high of Ksh9.40 ($0.094) in 2013.

KQ, which is set to be delisted from the Nairobi Securities Exchange after parliament approved its takeover by the State, widened its losses for the year 2018 to Ksh7.5 billion ($75 million) from Ksh6.4 billion ($64 million) in 2017.

Its net loss for the six months’ period to June 30, 2019 more than doubled to Ksh8.5 billion ($85 million) from Ksh4 billion ($40 million) in the same period the previous year (2018).

Globally, the International Air Transport Association (IATA) forecast the aviation industry will lose $29 billion worth of passenger revenues this year, of which $40 million will be from African airlines.

According to IATA, carriers outside the Asia-Pacific are forecast to lose $1.5 billion, assuming the loss of demand is limited to markets linked to China.

Global traffic is forecast to drop, causing the first overall decline in demand since the Global Financial crisis of 2008-2009.

“This will be a very tough year for airlines,” said Alexandre de Juniac, IATA’s director general and chief executive.

“It is clear the airlines are struggling. Our initial analysis suggests that we are facing a 4.7 per cent hit on global demand. That could more than eliminate the 4.1 per cent growth we forecast for 2020 in December.”

Kenya Airways flies to Guangzhou, China’s third-largest city, three times a week.

Before the suspension of the flights, a passenger from China was quarantined after being suspected to have contracted the deadly flu-causing virus.

Regional airlines such as RwandAir and Air Tanzania have also suspended flights to China over the viral outbreak.

Globally, Virgin Atlantic, Germany’s Lufthansa, Air France and KLM SA have also stopped flying to China.

Kenya’s lawmakers have approved the nationalisation of KQ to save the airline that has been run down by mismanagement and mounting debts.

The government has adopted a plan to buy out KQ’s minority shareholders and convert shares held by commercial banks into debt.

Under the plan, the government will also create a special purpose vehicle — Aviation Holding Company (AHC) — to manage Kenya’s aviation sector.

The AHC will have four subsidiaries — Kenya Airways, Kenya Airports Authority, Jomo Kenyatta International Airport and a centralised Aviation Services College, which will be run independently.

KQ is 48.9 per cent owned by the government, and a group of 11 local banks which own 38.1 per cent of the shares.

Other shareholders include KLM Royal Dutch Airline (7.8 per cent), employees (2.4 per cent) and other shareholders at 2.8 per cent.

However, the airline is facing difficulties keeping up with its competitors such as Ethiopian Airlines, Rwandair, Emirates, Qatar and Etihad, which are all fully state-owned and subsidised, and have engaged in aggressive growth strategies focused on volume and market share.

KQ’s former chief executive Sebastian Mikosz quit in mid-December after he declined to extend his three-year contract, which expired on December 31, citing personal reasons.

In July last year, chief operating officer Jan De Vegt resigned after serving for three years, and chief financial officer Hellen Mathuka was suspended in September.

KQ was listed on the NSE in 1996 after the government offered a 51 per cent stake to the public at an offer price of Ksh11.25 ($0.11) per share.

Our Source: https://www.theeastafrican.co.ke/business/KQ-counts-lost-revenue-after-flying-out-of-China-route/2560-5465490-1s1k0h/index.html

The dreaded Corona Virus that has so far claimed over two thousand lives could cost the worldwide airline revenue over USD 5 billion dollars, the International Civil Aviation Organisation (ICAO) has said.

As the countries try to prevent the spread of the disease into their cities, airlines world wide have cancelled flights to China while Chinese airlines have been forced to cut down on their services due to poor demand for flights.

Kenya Airways was among the airlines that cancelled flights to China in a bid to protect their passengers and crew. Kenya Airways suspended all flights to and from Guangzhou in China on January 31.

Among other airlines that have suspended flights to China include Qatar Airways, Emirates, KLM, Egypt Air, Turkish Airlines, Lufthansa, RwandAir and British Airways.

ICAO reported that some 70 airlines have cancelled all international flights to/from mainland China, and that a further 50 airlines have curtailed related air operations. This has resulted in an 80% reduction of foreign airline capacity for travellers directly to/from China, and a 40% capacity reduction by Chinese airlines.

ICAO’s preliminary estimates indicate that the first quarter of 2020 has instead seen an overall reduction ranging from 39% to 41% of passenger capacity, or a reduction of 16.4 to 19.6 million passengers compared to what airlines had projected. This equates to a potential reduction of USD 4 to 5 billion in gross operating revenues for airlines worldwide.

The above estimates do not include potential impacts due to reductions in international air freight movements on cargo-only aircraft, airports, air navigation service providers, to Chinese domestic air traffic, or to international traffic with respect to the Hong Kong and Macau Special Administrative Regions of China, or its Taiwan Province.

With respect to major tourism-related impacts in the first quarter of 2020 due to reductions in Chinese air travellers, ICAO estimates that Japan could lose USD 1.29 billion in tourism revenue, followed by Thailand at USD 1.15 billion.

The agency also noted that Corona Virus impacts are expected to be greater than those caused by the 2003 SARS epidemic, in light of the higher volume and greater global extent of the flight cancellations being seen. Seasonal passenger load factors are another extenuating factor, as is the fact that China’s international air traffic has doubled, and its domestic traffic increased five-fold, since the 2003 period.

And as China struggles with the virus, the World Travel and Tourism Council (WTTC) has urged against the stigmatisation of tourists and groups from China over the virus.

The president and CEO of the body that represents the global travel and tourism private sector Ms. Gloria Guevara made the appeal stating that the panic, seen as a way of containing the Corona Virus could run the risk of stigmatising one of the world’s biggest tourist groups and may cause long term harm.

The United Federation of Travel Agents Associations (UFTAA) noted that the virus has caused extreme damage due to the loss of lives and over 70, 000 infections.

The disaster, UFTAA President Mr Sunil Kumar said, has also disrupted tourism.

He urged the member agencies to honour the appeal of the China Association of Travel Services (CATS) for support and assistance as association members, in order to minimize the losses of Chinese Tourists and Chinese Travel Agencies to strengthen the much-affected Chinese Tourism.

Our Source: Kenya Association of Travel Agents (KATA)

Registration of new aircraft owned by wealthy Kenyans and private aviation firms nearly doubled last year in a mark of growing affluence that has been driving up demand for air travel.

The Kenya Civil Aviation Authority (KCAA) registered 87 new aircraft last year, up from 48 fresh listings in 2018, pushing the number of planes in the country to 1,548, excluding those owned by the National Police Service and the Kenya Defence Forces.

The 1,548 aircraft comprise those belonging to operators of scheduled and charter flights and privately-owned planes that operate from small airports and airstrips.

Kenya’s business magnates, politicians and new millionaires are fast taking to the skies as the preferred mode of transport – expanding the market for leasing and private ownership of planes.

Apart from urban-based business leaders, politicians and wealthy deal-makers, Kenyan skies are also dominated by large-scale farmers and ranchers based in Nanyuki, Kitale, Laikipia and Narok.

The farmers mostly use their small aircraft to spray their crops.

“There is a spike which we can only attribute to increased demand for these equipment, which for us is good progress in the aviation sector,” KCAA Director-General Gilbert Kibe told the Business Daily in an interview Wednesday.

“These are mainly helicopters and small aircraft owned by individuals and low-cost local carriers since we do not register military and police airplanes.’’

Aero Club of East Africa – a lobby group of private aircraft owners – attributed the growth in the number of registered planes to Nairobi’s rising status as the region’s business hub and a growing number of wealthy individuals with the means to own and maintain an aircraft.

About 356 billionaires were living in Kenya in 2018, according to the Africa Wealth 2019 report published by Mauritius-based AfrAsia Bank, placing the country at number four in a ranking of top African cities based on super-wealthy persons.

The wealth report ranked South Africa top with 2,169 billionaires, Egypt (932) and Nigeria (531). These individuals have net assets above $10 million (Sh1 billion).

Nairobi accounted for 73 percent of Kenya’s billionaires, reflecting the capital city’s economic dominance over the other 46 devolved units created in 2013 to address the wealth imbalance. The heavy concentration of billionaires in Nairobi indicates inequality in the country’s economic development, which has partly been attributed to the previous centralised system of government that guided sharing of resources since independence.

When the devolved system of government was introduced in 2013, it raised hopes of addressing the economic imbalance, but analysts say there is a need to offer incentives to attract private investors to counties.

Besides convenience, wealthy individuals have also acquired aircraft to satisfy their ambitions for reliable and personalised travel.

Air operators say that the biggest headache in owing an aircraft lies in operational and maintenance costs, including high jet fuel prices, airport landing fees, parking fees, insurance and spare parts.

Wilson Airport in Nairobi handles about 90 percent of domestic flights that mainly comprise chartered and commercial flights to holiday destinations such as Maasai Mara, Game Reserve, Mombasa, Amboseli National Park, Lamu, Kilimanjaro, Diani, Lokichogio and Nanyuki. It is currently ranked among the busiest airports in terms of aircraft movement in East and Central Africa.

Last year, 15 aircraft parked at Wilson Airport were placed on auction after their owners abandoned them at the facility, which had already started experiencing space constraints forcing the Kenya Airports Authority (KAA) to declare them a safety risk.

In a notice to the owners, KAA gave them 30 days to remove the different aircraft models, including those used for commercial passenger services.

The planes comprised smaller models like the HS 748, a medium-sized turboprop airliner and Beechcraft Baron (BE200 and BE90 belonging Canadian Operator Knight Aviation mainly used for chartered flights by the rich going for holidays and short trips within the country.

The cost of running the aircraft are increasing with the regulations requiring that they be parked at gazetted points like Wilson Airport, which adds to the ownership bill.

Growth in the number of registered aircraft has also offered job openings for pilots, cabin crew and engineers. Several companies running charter flight services have recently moved to boost their fleet capacity to match growing demand on both domestic and international routes.

Kenya’s higher share of billionaires as well as the opulence reflected in the purchase of planes is not in tandem with the relatively hard economic times the country has experienced in the past three years and the resulting fall in corporate profits that has seen thousands of people lose their jobs.

Over the three years, Kenya has elevated political uncertainties following a bruising presidential election in 2017 that put on hold many investment decisions. This was compounded by poor weather that has held back farming — which accounts for a third of the country’s gross domestic product (GDP).

The Kenyan economy expanded by 6.3 percent last year compared to 4.9 percent in 2017 but the drought is forecast to cut it to 5.7 percent last year.

AfrAsia Bank reckons the significant share of Kenya’s super-wealthy has attracted dealers in luxury brands including car dealers, hotels and fashion products.

Our Source: https://kenyantribune.com/the-rich-crowd-skies-as-aircraft-numbers-double/