Kenya Airways faces a stiff challenge in the East African airspace as Uganda moves to revive its national carrier just a few months to the arrival of high-capacity planes ordered by RwandAir.
Uganda has announced plans to revive its airline in a move that could end KQ’s dominance.
President Yoweri Museveni has directed the Cabinet to conclude discussions with investors to start a national airline as a matter of urgency.
“Ugandan travellers are suffering because of, apparently, not having a national airline. I thought that our brothers in Ethiopia, Kenya and South Africa would serve all of us. That, however, is apparently not the case,” the Daily Monitor quotes Mr Museveni as having said.
KQ has been capitalising on the absence of national carriers in some of the Eastern and Southern African countries such as Uganda, Burundi, Tanzania, Zambia and Malawi to grow its revenues.
No, but it was clear the primary criteria was nepotism. A guy called Stanley Simiyu whose mother was a secretary to Naikuni got what should have been my job. And he was a university dropout.
Prof Githu Muigai once said: “The man in front of you today is a mortician, The patient died on the operating table. If you think the patient should have lived, ask the surgeons”
Below are the morticians in the Kenyan corporate world. We all know who the patients are. As for the surgeons, its for you to guess.
Just having an airline doesn’t mean its money in the bank. How many times has Uganda tried to start an airline with investors, Air Uganda (UG gov and Aga Khan) made losses for years until it folded. This was despite it given KQ prime time slots. Tz pushed for fastjet entry to Kenya but its making such big losses that the majority shareholder Sir Stelios is trying to replace all the management for burning out £80 million in 3 months. Fastjet is having problems filling even 1/3 of the flights to JKIA despite cheaper fares.
I am for cheaper fares but it has to be sustainable for the airline as well i.e pay for fuel, landing fees, wages, service per hour and some profit. If its not then sooner or later the airline will shutdown. The answer to KQ problem flying to Ug and Tz is that the premium fares are not good for such short haul trips. KQ needs to offload alot of those slots to its subsidiary Jambo Jet and compete in that low fare segment. Low fares only work if you can replicate high volume. Cheap fares without more that 1/2 plane capacity all the time is a disaster in the making.
10 years ago before Ethiopian finally matched KQ african network, KQ selling point was shorter turnaround at JKIA where passengers from East, Central, West and South African regions could quickly get connecting flight from JKIA to europe, middle east and asia. For that KQ charged more because they knew previously connecting passengers paid more for hotels and day long connecting flights at Jo’burg, Addis or even some in europe. There problem started when they relaxed and Ethiopian airlines caught up then beat us in our own game. Bad calls from management like the expensive fuel hedging and buying big long haul planes 777-300er’s without enough seating demand was a disaster.
Emirates, Qatar, China southern airlines, Etihad Airlines, Oman Air and US-based Omni Air.
The current management are facing the results of past poor management decisions. Let them finish the turnaround then replace them with visionary managers. KQ has already hit rock bottom, cleared its toxic accounts, poor/loss performing routes and idle aircraft. Now its to improve its cash reserves and lower debts before a turnaround strategy can begin.
Hapa umeongea kama wazee kumi wa Luo council of Elders. For those short haul flights, nobody needs luxuries za food and drinks and blankets and headphones. That is why fly sax and 540 are surviving in the market and KQ is struggling.
Kipngetich will save Uchumi even though he got it at ICU just as he did with KWS. He has stopped the open fraud by management at HQ, cleaned the supply chain to remove employees who were doubling up as suppliers and paying themselves lucratively. The only problem are 5 major suppliers (whom Uchumi owe 90% of its debt) are not yet fully convinced on the turnaround strategy. If they sign up today then within a month Uchumi will have restocked, a few months paid off outstanding payments and within a year it will have managed the debt. Going forward Uchumi will need a strategic investor who are now in plenty and that will avoid future gov bailout. Uchumi still makes 100’s of millions a months and that will save it if the doors remain open.