National carrier Kenya Airways (KQ) has announced that it anticipates 25 per cent or more lower earnings for the period ending December 31, 2019 when compared to 2018, pointing to wider losses this year despite several cost cutting measures by the carrier.

In a notice signed by Kenya Airways Board Chair Michael Joseph, the troubled airline blamed the performance on stiff competition.

“Although Kenya Airways realized improved revenue growth in the year, profitability was constrained by the increased competition in the airline area of operations, which, in turn, has increased pressure on pricing in order to remain competitive,” he said.

“In addition, the adoption of new International Financial Reporting Standards (IFRS) 16 rules in 2019, has required significant adjustments to both the profit and loss statements and balance sheets for the current financial year,” he added.

The profit warning means that KQ will report a net loss greater than the Ksh7.5 billion ($75 million) that was recorded in December 2018 when higher costs offset a jump in revenue.

The troubled airline has been making efforts to improve earnings after several years of posting losses.

Fuel, personnel and cost of aircraft have been identified among the top three drivers of KQ’s expenses, contributing to about two-thirds of the operating costs.

Earlier this year, the board had announced that KQ – which is 48.9 per cent government-owned and 7.8 per cent by Air France-KLM – plans to double its fleet over the next five years if they can find the right financial structure.

Following the resignation announcement by outgoing CEO Sebastian Mikosz earlier this year, the airline on Monday appointed Jambojet chief executive Allan Kilavuka to fill the seat in an acting capacity.

Mr Kilavuka’s appointment is effective January 1, 2020.

Mr Mikosz, to the shock of many, opted out of the top job before the expiry of his contract that was to end in June next year citing personal reasons.

The Polish national used strategies such as fleet expansion, addition of new routes and collaboration with African airlines in hopes of turning around KQ’s performance.

Our Source: https://www.theeastafrican.co.ke/business/Kenya-Airways-issues-profit-warning/2560-5390198-hti4q8/index.html

Kenya Airways (KQ) has announced the appointment of Allan Kilavuka as its acting chief executive officer, replacing Polish national Sebastian Mikosz who opted out of the top job before the expiry of his contract.

Mr Kilavuka is the current CEO of the airline’s low cost subsidiary Jambojet.

The airline’s board in a statement sent Monday indicated his appointment is effective January 1, 2020, and that he will serve in the role until a substantive CEO for Kenya Airways has been recruited and appointed.

“Allan will also continue his role as Chief Executive Officer of Jambojet during the interim period of recruitment,” said the statement signed by Company Secretary Catherine Musakali.

“The Board wishes to emphasise that the recruitment process for a substantive Chief Executive Officer with the necessary experience and knowledge was initiated upon the announcement of Sebastian Mikosz’s decision to leave the airline at the end of 2019. The process is still actively on going and the Board will inform all our stakeholders once a suitable candidate has been identified.”

Mr Mikosz earlier this year in a shock announcement said he will quit from the helm of the airline in December, coming before his term expires in June next year.

In a memo to KQ staff, he cited “personal reasons” as the reason for throwing in the towel.

“It is my personal decision and I have obviously discussed it with the Board as well as with my family. I believe that this is the ideal timing to begin a transition process to find someone who will continue with the turnaround initiatives that we began 3 years ago,” he said in the memo.

Mr Mikosz, who helped turn around flag carrier LOT Polish Airlines as its CEO, was hired in June 2017 to also turn around the struggling KQ.

His strategy included fleet expansion, adding of new routes and collaboration with African airlines that were seen as a threat to KQ’s regional market share.

The airline is in the process of nationalisation, coming after Parliament in July voted to nationalise NSE-listed company Airways to save it from mounting debts.

The government has now set out on a nationalisation plan, with Treasury looking to buy out KQ’s minority shareholders and converting shares held by commercial banks into Treasury bonds.

The loss-making carrier is 48.9 percent government-owned, 38.1 percent by banks, 7.8 percent by Air France-KLM, 2.4 percent by Kenya Airways employees and 2.8 percent by small investors.

KQ chairman Michael Joseph recently called for professionalisation of the airline’s board to avoid picking politically-connected directors so as to give the troubled company a chance of survival after nationalisation.

Our source: https://www.theeastafrican.co.ke/business/Kenya-Airways-names-acting-CEO/2560-5387334-4sdtkjz/index.html

 

 

The Kenya Civil Aviation Authority(KCAA) has denied Saudi Arabian Airlines and Ethiopian Airlines changes on key air service licenses, deaming their expansion quest mainly on cargo services.

In its latest decision on 27 licence applications, it granted 14 licenses and varied 10. One has been deferred while two variations denied.

These were “mainly renewals , variations and few new ones,” KCAA director general Gilbert Kibe told the Star yesterday.

Saudi Arabian Airlines had sought variation of the existing licence to include new routes of Jeddah(Saudi Arabia)-Nairobi-Maastricht (Maastricht) and Jeddah-Nairobi-Liege(Belgium).

Ethiopian Airlines on the other hand had applied variation of existing air service licence to include aircraft type B737F. The two were mainly targeting to expand their cargo services.

In a gazette notice dated December 13, KCAA said the licenses were “not granted,” without further explanation. Kibe yesterday noted the decisions were made on reasons, which cannot be shared with the public.

“Not for public information,” Kibe said.

Airlines seeking to change or make slight differences on their licenses, which define their operations, must apply for variation.

KCAA decision on Ethiopian Airlines is however seen to be based on safety concerns on the aircraft type, noting that in 2010, the airline’s Boeing 737-800 passenger plane exploded after taking off from Lebanon, killing 83 passengers and seven crew members.

In March this year, its Boeing 737 Max-8 crashed shortly after take-off from Addis Ababa, killing all on board.

Saudi Arabian Airlines however has been allowed to operate international non-scheduled all cargo air service on 13 major routes among them Jeddah-Nairobi-Jeddah and Jeddah-Nairobi-Moscow.

It can also service the, without traffic rights between, Nairobi and Eldoret-Johannesburg-Addis Ababa-Dar-esSalaam-N’djamena-Lagos-Kano-Khartoum-Niamey and vice versa using aircraft types B777F, B747-800F and B747-400F based at Jeddah, Saudi Arabia.

“Licence granted for two years with effect from January 14 , 2019 without the routes Jeddah/Nairobi/Liege, Jeddah/Nairobi/Maastricht,” KCAA said in the notice.

Ethiopian Airlines has been granted a two-years license, with effect from October 3, 2019 to operate international non-scheduled all cargo air service on the routes Addis Ababa-Nairobi- Addis Ababa and Liege- Nairobi-Addis Ababa using aircraft types B737-800F and B7 77-200F based at Addis Ababa, Ethiopia, “without aircraft type B737-800F.”

Other airlines granted licenses include Smartwings Poland which will mainly operate tour charters flights to Mombasa, a boot to the tourism sector. The company has a one year licence effective December 9.

Tanzania based-Regional Air Services Limited has also been granted rights to operate non-scheduled air service for passengers between designated entry-exit points in Kenya and Tanzania.

Licenses that have been allowed variation inlcude Pro Flight Limited,Aberdair Aviation Limited,

Aerolink Flight Centre Limited, SAC (K) Limited, HAMCO Aviation Limited and Governors Aviation Limited.

Others are Renegade Air Limited, Penial Air Limited and Westwind Avaition Limited which has also been granted a three-year license.

Jambojet has been granted a three-year licence to operate non-scheduled air service for passengers, cargo and mail within, out of, into Kenya to from points in Africa, rest of the world which also incoude its existing routes. It licence is effective December 17.

Vintage Air Charters Limited, Bonge Air Services Limited, Level Up Limited ,Lady Lori Helicopters Limited and Ocean Airlines Limited have all been granted one year licenses to operate in the country and beyond.

Capital Airlines Limited, Flight Training Centre Limited, Seven Four Eight Air Services (K) Limited and Capital Connect Aviation Supplies Limited have also been licensed.

The licence application for Imatong Airlines Limited has however been deferred. It sought to operate Non-scheduled air service for passengers and cargo within the

 

Our Source: https://www.the-star.co.ke/business/kenya/2019-12-16-kcaa-denies-saudi-ethiopian-airlines-expansion-rights/

Kenyans travelling to European Union countries on a Schengen visa will pay at least Sh2,265 more in fees starting from February.

The higher charges come into force after the European Union Council adopted an updated Schengen Visa code.

Consequently, the Schengen visa fees will increase by 33.3 percent to €80 (Sh9,060) from €60 (Sh6,795) from February after the amended regulation came into force.

Children too will have to pay more at €40 (Sh4,530) instead of €35 (Sh3,964) paid currently.

The new code is, however, expending the period within which an application can be lodged from three months to six months in advance of a trip.

A Schengen visa is a short-stay permit that allows visitors to Europe to travel to any of the 26 states, which are members of the Schengen area, up to 90 days for tourism or business.

It enables the holder to enter, freely travel within, and leave the Schengen zone from any of the member countries which include Austria, Belgium, Estonia, Finland, France and Germany among other European Union nations.

An increasing number of Kenyans have been seeking Schengen visas as travel to Europe for tourism takes root, with popular destinations including Mediterranean resort cities.

According to the updated regulations, Kenyans applying through an external visa service provider may, however, have to pay up to €160 (Sh18,120) per visa application, if the external service providers set the maximum service fee permitted, which is €80.

Statistics by SchengenVisaInfo.com show that in 2018, Schengen embassies and consulates in Kenya processed 38,503 visa applications, 4,769 of which were rejected, representing an acceptance rate of 87.6 percent.

Germany was the top country for visa submission, as 6,142 of the applications submitted in Kenya were for Schengen visas to Germany, followed by France with 5,059 and the Netherlands with 4,406 applications.

In terms of expenditure, in 2018, Kenyan citizens spent €2.31 million (Sh261.6 million) on visa applications to Europe, €286,140 (Sh32.4 million) of which was spent by applicants who had their visa applications rejected.

Source: https://www.businessdailyafrica.com/economy/Kenyans-to-pay-more-for-EU-s-Schengen-visa/3946234-5391082-e2s0ij/index.html

 

Domestic airfares have nearly doubled ahead of Christmas on increased demand with some routes recording full bookings a week to December 25.

Ticket prices from Nairobi to Kisumu have risen to a peak of Sh14,800 from an average of Sh6,800 during week days and about Sh10,000 on weekends.

Flights to the coastal city of Mombasa from Nairobi are almost fully booked with the cost of remaining seats increasing to Sh15, 800, from an average of Sh7, 800 in November.

Air ticket prices to Eldoret from Nairobi, which is a cheaper route compared to other destinations, have increased to Sh7,800 from an average of Sh4,200 during the low season. The quoted fares are based on yesterday’s bookings and are likely to continue rising as the Christmas holiday approaches. The prices on all routes are set to come down on Christmas Day as the number of those seeking to travel reduces significantly.

Jambojet chief executive officer Allan Kilavuka said the high fares were the product of high demand for air travel during the festive season.

“More people want to travel and there is less capacity in the market. This is what has pushed up the cost,” said Mr Kilavuka in a phone interview with the Business Daily yesterday.

The standard gauge railway (SGR) passenger train service between Nairobi and Mombasa is also fully booked ahead of Christmas, forcing holiday makers to seek expensive alternatives like road and air transport.

The bookings register shows that trains are fully booked in the days leading to December 25, signalling increased travel to Mombasa and offering a boost to hotels.

Lack of space on the SGR service, which charges Sh1, 000 for economy class and Sh3, 000 on the first class coaches, has benefited bus owners and airlines like Jambojet and Silverstone as families look to enjoy the holiday in the Coast region.

Air fares to Eldoret from Nairobi have been relatively low as the route is still not as popular as Kisumu and Mombasa. The route remains the cheapest among the major domestic flight routes due to low demand. Flights to Mombasa have traditionally been higher than Kisumu, but the fares to the two cities from Nairobi now nearly match due to pent up demand from passengers travelling to Western Kenya.

The carriers’ main challenge has been convincing Kenyans to book early, which is vital to the low-cost pricing model.

Last Friday, air fares to Kisumu from Nairobi between December 18 and 20 were costing a low of Sh4,200 one way on Jambojet, but they have since increased to Sh14,800.

The cost of the ticket is also determined by the time of travel with morning and evening flights tending to be expensive compared to afternoon planes.

For instance, passengers taking the midday flight to Eldoret will pay Sh7,800 in the morning while those travelling in the evening will part with Sh8,800.

Those flying to Mombasa between December 20 and December 25 will pay a low of Sh13,800 and a high of Sh15,800 depending on the day and time for a one way ticket.

Fly 540 flights to Lamu are fully booked between December 18 and December 24 with only one available seat on Christmas Day selling for Sh15,540 for a one way. Last month, one could get an offer starting from Sh5,270 on the same route.

Passengers flying to Kisumu on Fly540 will part with Sh14,540 on Christmas eve with only two available flights in the morning and evening on this date.

Skyward Express flights to Mombasa are fully sold out between December 23 and December 26, reflecting the high demand.

Airlines have increased the number of flights to popular destinations in response to high demand for air travel.

Jambojet has added 54 additional flights per week on most of the routes that it flies too as demand goes up.

According to the airline, they have increased return flights to Mombasa by 11, Ukunda six, Malinidi five, Kisumu two and Eldoret three. These are in addition to the already existing flights on these routes.

Source; https://www.businessdailyafrica.com/corporate/companies/Airfares-double-as-Christmas-travel-demand-soars/4003102-5389740-110euo3z/index.html

 

Kenya Airways will offer discount on tickets to the business community travelling in the next 10 months for Expo Dubai 2020.

The World Exposition, Expo 2020 Dubai, which will be held for six months from October 20, 2020 to April 10 2021, is set to provide a platform for more than 192 countries to showcase economic, technological and cultural experiences as well as promoting investment.

Kenya confirmed participation and signed the contract on May 14, 2018, through the Kenya State Law Office to allow both public and private sectors to showcase the country as the leading exporter of talent, rich culture, sports, and traditional exports including tea, coffee, textiles and labour services.

The government expects to attract small-scale traders and businesses including artefacts, home decorations, leather works and fisheries.

Brand. KE is responsible for planning and co-ordination of Kenya’s participation at the Expo Dubai 2020 under the Ministry of Trade, Industry and Co-operatives.

Source: https://www.businessdailyafrica.com/markets/marketnews/KQ-offers-traders-discounts-for-Dubai-2020-Expo/3815534-5392198-4loyekz/index.html

 

Africa’s future growth depends on policies that allow free movement and enable young people to look for opportunities beyond national borders.

United Nations Conference on Trade and Development (Unctad) secretary-general Mukhisa Kituyi said at the ongoing Kusi Ideas Festival at Intare Arena in Kigali that the continent currently has a generation of young people who were more interested in collaborations than competition.

Dr Kituyi spoke on the panel discussion themed, ‘Borderless Africa and why it is a winner’, that also featured Linus Gitahi, a board member of Msingi East Africa, and Rwanda Development Board chief executive Clare Akamanzi.

“These young people look for opportunities beyond national frontiers. They overlook analogue boundaries and all the physical boundaries as they chase their dreams. This is the future and governments now need to create policies for them to ease travel, access and movement across the continent,” Dr Kituyi said.

The panellists challenged Africa’s leaders to open up their borders to migrants and allow them to thrive within the continent as opposed to being self-centred and closed up, putting restrictive travel and migration policies.

 “We need to understand that almost 53 percent of migrant movements is intra-African and for Africa, we should take advantage of this.

“Migrants are good both for the country they move to in terms of new and fresh human resource and also the countries they come from, through remittances. We need to encourage that,” Dr Kituyi said.

“The millennials want to trade the way they go about their activities in social media. We cannot do them a favour. In the next 60 years, Africa will realise a mobilisation competition and the best example is the teen activist who is mobilising her campaign through social media and mobilising for a cause. This is the future and we need to offer the best groundwork for this kind of people to thrive.”

Ms Akamanzi cited Rwanda as the perfect example of how a borderless vision can spur growth in the continent.

“There is no reason to fear to open our borders. And as Rwanda, we have championed this for the last five years and it’s helped us attract visitors, investments and this is what a borderless Africa entails,” she said.

GOOD EXAMPLE

“As a country, we have also done the policy to become a proof of concept where we open up policies, make it so easy to set up businesses. This is a good example with firms that have set up through ideas, prototypes and help them set up then expand to the rest of the continent. Those are some great examples of how this can be done.” Mr Gitahi challenged governments to focus on new educational curriculum pushing for technology.

“We have to invest in the right education that encourages entrepreneurship and create Digi-tech. It is now important that we must create and support nontraditional careers like creative arts, creative business,” he said.

“We have to aggressively support our youths to protect their assets. Governments should have policies that protect these creative ideas through patents and copyright registration.”

The participants also urged African governments to support the youth to access capital to promote their enterprise ideas to help them become viable and also create jobs.

“We must encourage our small and medium enterprises (SME’s) to integrate and prosper. We give them easy access to capital and also a good business environment. They are being run by young people and this will spur their growth story,” said Mr Gitahi.

Source: https://www.businessdailyafrica.com/news/Africa-s-leaders-challenged-to-open-borders/539546-5379768-11gh0u2z/index.html

 

Travelstart has entered into a distribution and commercial agreement with Jumia Travel to power the latter’s pan-African online travel booking portal. Under the agreement, Travelstart will take control of the sales, fulfilment and customer service aspects of Jumia Travel online booking websites in all its operating territories.

“We have a strong belief in the potential of the online travel industry and travel portals in Africa and have built a strong platform across our markets to address this opportunity. In Travelstart, we have found the perfect partner to build on the success Jumia Travel has achieved so far. While we will continue to promote the travel category, Travelstart will be responsible for the operational side of the business. The travel ecosystem in Africa will be further energised by this partnership,” said Joe Falter, EVP Jumia On-Demand Services.

Jumia Travel operates in several African countries where it counts Kenya and Nigeria as its largest markets.

“This partnership will ensure we remain hyper-focused on our growth and path to profitability as we reinvest our resources in our key markets, services and technology to create the best customer experience in Africa and allow Jumia to thrive,” added Falter.

Travelstart, which operates in nine African countries, will use the partnership to tap new customers in markets where digital is emerging.

 “Twelve thousand customers travel with us daily. Being Jumia’s exclusive distribution partner will help even more travellers in Africa unlock high quality online travel services,” said Stephan Ekbergh, CEO of Travelstart.

Source: https://www.businessdailyafrica.com/corporate/companies/Travelstart-to-power-Jumia-Travel-across-Africa/4003102-5379704-iywogaz/index.html

 

 

Maasai Mara National Reserve, one of the top dollar earners, has dropped two places as Africa’s best safari destination, a new analysis shows.

Africa’s safaris company SafariBooking.com latest rating shows the reserve has dropped from eight in 2018 to 10 in 2019.

The safari company links the drop to park’s poor bush adventure and bird watching rating.

“The park being small, it sometimes gets over-crowded and hence many tourists prefer to visit Tanzania’s Serengeti National Park as it is expansive and un-crowded,” the company said.

A total of 157 parks across 11 African countries were reviewed in the study collated from 2,373 tourists and industry players from 83 countries.

The drop comes barely four-years after the park was awarded the best park in Africa by the World Travel Awards in Zanzibar.

It emerged top for its variety of wildlife, abundance of predators and the annual wildebeest migration.

Kenya Association of Hotel Caterers chairman Christopher Musau blamed the drop on encroachment of the park by locals and climate change.

“Climate change is real, for example, the Mau Forest that empties its water into the park is slowly being depleted and the effect is now being seen in the changes in pattern of wildebeest migrations,” he told the Business Daily.

Tanzania’s Serengeti National Park was voted the best safari park in Africa with a rating of 4.92 on a scale of five.

The East African country retained its dominance for its game diversity and the annual wildebeest migration.

Source: https://www.businessdailyafrica.com/markets/marketnews/Maasai-Mara-Africa-best-travel-destination/3815534-5378086-13gawjfz/index.html

 

The Kenya Airports Authority (KAA) will spend Sh350 million to fix potholes at Wilson Airport in a move aimed at reducing increasing number of plane mishaps at the facility.

Kenya Civil Aviation Authority director-general Gilbert Kibe told the Business Daily in an interview on Friday that major works on the project will start once local firms with planes exceeding seven tonnes operating at Wilson airport relocate to Jomo Kenyatta International Airport (JKIA) Nairobi.

Local air operators have pointed at the potholed runways as the cause of the punctures at the airport that have led to some planes skidding off the runways.

“The immediate requirement for major rehabilitation at Wilson Airport is Sh350 million. This is what we require for now,” said Mr Kibe.

Mr Kibe did not give a specific timeline within which he expects work on the project to be finished. “We are working with the support of the Kenya Airport sAuthority on this project. They are determined to do it,” he said.