16 August 2014

Kenya: Why KQ Is Justified to Stick With West Africa Routes

Titus Naikuni, the chief executive of national carrier Kenya Airways, has dealt with many crises during his tenure at the airline, which ends later this year.

The Ebola outbreak in West Africa perhaps presents as daunting a challenge as any he has faced in the past.

Against calls to suspend flights to the Ebola-stricken region, the airline has decided not to pull out from the routes.

Critics, including members of the National Assembly and the medical practitioners fraternity through the Kenya Medical Association, have accused KQ of placing profits ahead of human life.

The worry is that the airline could ferry Ebola victims to Kenya and bring the deadly scourge into a country that so far has had zero reported cases of infection.

Kenya Airways' management counters that measures are in place to screen all passengers. President Uhuru Kenyatta has offered his support to the airline, saying West African countries should not be shunned.

There is reason for Kenyans to be concerned though. Ebola has so far killed over 50 per cent of the afflicted during the current outbreak.

Cases occurring outside the continent are suspected to have been ferried by air from West Africa.

Kenya Airways is Africa's most connected airline with more routes to African airports than any other. Ethiopian Airlines and South African Airways come in second and third.

While there is cause to worry over the potential importation of this deadly virus into the country, it is insufficient a reason to ask Kenya Airways to ground its West African flights. That would be close to asking the airline to shut down altogether.

To understand the dilemma the airline faces, the business model of KQ needs to be explained.

The airline runs what it calls a 'hub and spoke' model. The hub is Nairobi and the spokes are its routes originating out of or terminating at Nairobi's Jomo Kenyatta International Airport.

The way the operations of the airline are coordinated is that it uses its long-haul jets -?? the 787 Dreamliners and Boeing 777 wide body jets -?? to bring in international passengers from Europe, Middle East and the Far East Asia into Nairobi.

It then uses its short-haul jets, the Boeing 737 series and the Embraers, to take the passengers to different African countries.

It also does the reverse, bringing in passengers from all over the African continent into Nairobi and then transfers them into long-haul jets to overseas destinations.

Combined with Kenya's positioning, being four hours on average from almost any destination in Africa has made Nairobi an important airline hub. So much so that in 2010, JKIA overtook Cairo and Johannesburg as Africa'??s busiest cargo airport.

Indeed, many international companies and organisations have relocated their bases from South Africa for this very reason; the convenience of taking short flights to other parts of the continent.

To this end, Kenya Airways has invested in opening more African routes than any other airline. This is a big sell to Chinese or Middle East businesses wishing to fly to obscure capitals.

However, West Africa is by far its most lucrative route, especially Nigeria. In many West African countries, national carriers collapsed long ago leaving foreign airlines to service their routes.

West and Central Africa routinely contribute huge margins to Kenya Airways' bottom line. Indeed, whenever the airline'??s workers go on strike, it has always precipitated a transport crisis in many of these countries.

However, beyond the short-term business considerations are political concerns.

We do not have open skies in Africa. Any cross-border route is a political negotiation usually occurring at government-to-government level.

Before taking a decision to discontinue these routes, any airline must think long and hard as to the likely political consequences of making such a choice.

Indeed, so far, Europe's top two airlines, Air France and Lufthansa, through its Brussels Airlines subsidiary, are still flying their West African routes including to Sierra Leone and Liberia.

British Airways has discontinued flights to these two countries but it is still flying to Abuja and Lagos in Nigeria.

All are keenly aware that once the Ebola threat boils over, affected countries are likely to assess carefully who they grant business. Just like granting landing rights to airlines is a political decision, so is revocation of those same rights.

Kenya Airways has, unlike its European counterparts, invested itself to have the most extensive network on the continent. To be sure, it costs less to the airline to put in place stringent screening measures than to cancel West African routes.

The airline is thus justified in remaining steadfast to these destinations.


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