16 April 2014

Kenya: Boeing 787 Presents New Challenge to KQ

Kenya Airways - the Pride of Africa - now counts Boeing 787 Dreamliner among its fleet. The acquisition places KQ on the road to modernity, with flight comfort sampled, and assured, on arrival by President Uhuru Kenyatta.

Direct flights, say from Seattle to Nairobi, Paris to Nairobi, or Nairobi to Guangzhou, or Frankfurt, that Boeing 787 Dreamliner delivers in record time, makes good business sense. And KQ is within its adventure rights to dream of great inflight times ahead.

With nine Dreamliners in its fleet, when fully delivered, KQ will have the potential to fly to nine of 20 most-visited cities across continents, with guaranteed comfort to its high value clientele. But there is the small business of balancing comfort with profits, given the huge investment.

Barcelona, Miami, Mecca, Bucharest, Las Vegas, Singapore, Rome, Pattaya, Dublin, Kuala Lumpur, Antalya, and other cities would be a flight away for the Pride of Africa. Even Seattle, in the far northwest of the United States, the base of this aero-technology, would be a mere 16 hours away, instead of the usual stopovers of 36 hours or more.

At about Sh11 billion apiece, and Sh99 billion for the Boeing 787 fleet, KQ will need 270 regular passengers and prize cargo to deliver a direct Nairobi-Sydney, Australia, flight at a profit.

Without the right cargo and passengers, regularly, on, say, the direct Nairobi-Dallas flight, the dream could tumble. Without high value cargo, say gold, the Boeing 787 Dreamliner may struggle running a profitable, say vegetable or flower cargo flights between Nairobi and New York.

Lufthansa, the premier German airline, dropped the direct Nairobi-Frankfurt flight, in the 1990s. The airline did not have enough passengers and prize cargo to make the flights regular and profitable.

Air France, a prize member of the Sky Team that includes KLM, the premiere Dutch airline married to KQ, dropped the direct Nairobi-Paris flight because it did not make business sense. Alitalia did not have enough cargo for the Nairobi-Rome flight to make regular flights profitable. Olympic Airline of Greece dropped out, so did West Africa Airlines on the Nairobi-Lagos-Abuja round.

Kenya has been struggling for direct flights to the United States for years now. But Jomo Kenyatta International Airport does not have the necessary safety and security certification to make such flights possible. Neither does the international airport in Mombasa.

Even with nine Boeing 787 Dreamliners in its fleet, direct flights to the United States may remain a mirage. The renewed threats of terrorism make these direct flights a distant possibility.

Around here, Ethiopia Airlines was the first to acquire the Boeing 787 Dreamliner, with business intent of direct flights to long-haul destinations like Los Angeles, Toronto, New York, Atlanta, Moscow, and Beijing.

Ethiopia Airlines, Like KQ, the Pride Africa, acquired the bullet-speed Dreamliners to upgrade. As a top continental brand in the air business, Ethiopia Airlines did not want to play matatu in the sky with high-value frequent fliers. But high operational costs, without proportionate returns, drowned Ethiopia Airlines' excitement about Boeing 787 Dreamliner. The Lion of Juda is no longer excited about direct, long-haul flights. They are comfortable for the passengers, and safe for their cargo, but not so profitable for the operator.

All Nippon Airlines of Japan, the first recipient of Dreamliners, has it own not-so-flattering account with the aircraft, which is said to be prone to Lithium battery-related hitches.

It is possible for the Boeing 787 to cruise from Addis Ababa to Buenos Aires, Argentina, without a stopover in Abuja or in Washington, DC, to refuel or re-load. But the super-technology cannot make the top speed without high value passengers and cargo to balance the high cost of operations.

The first of nine KQ Dreamliners arrived in Nairobi from Seattle at bullet-speed eleven days ago, to the welcoming arms of President Uhuru Kenya. The arrival of the airplane, which Kenya Airways has christened 'Great Rift Valley', ended a four-year delay. The delay was attributed to "technical reasons". These reasons are probably known to KQ and the United States manufacturer in Seattle.

Six more Dreamliners are expected in Nairobi before the end of the year. Three more will be delivered from next year, to compete KQ's rebranding for the trans-continental market

The deliveries, if done on schedule, will mark exciting moments for the Pride of Africa, which has faced turbulent times, even with its marriage to KLM. But even with this betrothal to a major European airline, KQ has rarely returned a glossy performance in money terms.

KLM entered this marriage not so much to boost KQ's then lowdown global rating, as it was its own try to stay in the competitive global sky market.

Kenya Airways Chief Executive Officer, Titus Naikuni, who is due to retire at the end of this year, will have to rethink the Sh100,000,000,000 Boeing 787 Dreamliner investment, before he leaves KQ. It is for the good of his legacy that Mr Naikuni does not leave the Pride of Africa drowning in dreamland.

The writer is a media consultant.

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