Kenya Airways targets premium passengers for financial revival

Kenya Airways plans to target high-level customers, as part of efforts to revive the airline’s fortunes.

The airline came close to collapse, leading to a $2 billion financial restructuring in November last year that included a government bailout. It shrank Air France KLM’s stake according chief executive, Sebastian Mikosz.

Kenya Airways, majority owned by the government and 7.8 percent by Air France KLM, is sub-Saharan Africa’s third largest carrier by fleet after Ethiopian Airlines and South Africa Airways.

Mikosz, who previously helped turn around flag carrier LOT Polish Airlines as its chief executive, was hired to revive the airline.

“The priority continues to be on the financial side, so we did not finish the financial restructuring but we have to still prove that we can produce operating profits, “ he said.

But although the gap to profitability is closing, the 40-year-old carrier, which flies to 53 destinations with 38 Boeing and Embraer planes, is still making a loss. It has not said when it will return to profit.

It must compete with 25 foreign carriers operating out of Nairobi’s main airport, ranging from Ethiopian Airlines to Emirates to smaller rivals like Rwanda’s flag carrier, RwandAir, which has more than doubled its fleet to 12 planes in the last five years.

It has now launched 15-hour direct daily flights to New York. The United States is the fastest-growing source of tourists to Kenya but U.S. passengers from Kenya must now change planes in Europe or the Gulf, a journey that takes over 20 hours.

The U.S. flights are called the “$100 million project” internally, with the potential to boost revenue by 8-10 percent in the 2019 fiscal year, Mikosz said.

“Yeah we call it the a hundred-million dollar project but it means we expect that we will increase the revenue by 8 – 10% for 2019. Because this is a big operation, its a two wide body aircraft flying daily to New York. So its a big operation for us,” he added.

Kenya has long wanted to fly direct to the United States, but was only granted U.S. security clearance in February 2017 after a major refurbishment of Nairobi’s main airport.

REUTERS