10 December 2018

Kenya: KQ's Plan to Prop Up Jambojet Flops As Aircraft's Rejected

Kenya's national carrier Kenya Airways has postponed indefinitely the launch of its direct flight from Nairobi's Jomo Kenyatta International Airport (JKIA) to the Somali capital Mogadishu, as it faces opposition from several neighbouring countries over its intended change of aircraft on regional routes.

"We have postponed our maiden flight to Mogadishu until further notice. We are still facing delays in getting the additional operational requirement," Kenya Airways chief executive officer Sebastian Mikosz said on Tuesday.

Declined

Already, Burundi, Djibouti and South Sudan have declined to grant KQ permission to change the aircraft it flies to their respective capitals from the Embraer 190 to Bombardier Q400.

KQ termed the decisions taken by the neighbouring governments "politically motivated." The airline explained that it settled for the cheaper aircraft on its regional routes as part of its cost optimisation measures.

The carrier, which had initially planned to fly to Mogadishu beginning November 15, was to launch its direct flights to Aden Adde International Airport, Mogadishu, on December 5 in a move that was expected to boost trade with the Horn of Africa country.

Mid this year, Jambojet signed a lease agreement with Chorus Aviation for two Q400s, which are expected to be delivered before June 2019, bringing to seven the number of Q400s the low-cost carrier will operate.

Burundi declined the Bombardier DHC8-Q400 on the grounds that it has no Business Class section, while Djibouti and South Sudan flatly declined KQ's application.

KQ flies twice a day to Bujumbura, frequencies which, had it had its way, would now have been taken over by Jambojet. The same would have applied in Juba, where it flies twice daily.

The carrier is also still awaiting response from Dar es Salaam. Only Uganda has granted it permission, and Jambojet has taken up some of KQ's frequencies to Entebbe.

The switch to Bombardiers on short-haul flights - because they are less costly to operate - is part of KQ's new operational strategy, that if it eventually succeeds, will upgrade its subsidiary, Jambojet, to take over these routes, giving the airline easy access into the regional aviation market.

"These rejections have hampered our regional expansion plans. So while we have an aircraft that is much cheaper to operate and is a very decent one that even the UK and US carriers are operating, but political decisions will not allow us to operate it," Mr Mikosz told the country's National Assembly's Transport Committee, adding that the most fundamental challenge KQ is facing is the danger of losing its position in the African aviation market.

New equipment

In July, the airline had indicated that it was interested in the Bombardier C-Series or Embraer's E2 jet for a short-haul order of 15-20 aircraft, with a decision possibly coming at the end of this year.

"We have been inspired by Air Baltic's order of up to 60 CS300 jets even though the performance of the C-Series has to be studied.

"One of the issues we are looking into is the availability of maintenance for the C-Series in Africa, but with several African airlines looking at them, then this should be a big concern," Mr Mikosz said on the sidelines of the annual IATA airlines meeting in Sydney.

However, KQ's choice to use smaller Bombardier aircraft in the region could spell a boon for its competitors who are now using wide-bodied aircraft on these same routes, which could portend a double-edged sword for its operations.

For instance, Ethiopian uses the Boeing 737 for its regional operations namely on the Dar es Salaam, Mogadishu, Juba and even Djibouti route, while on the Nairobi-Dar route, which is KQ's second most profitable in the region after Entebbe, Air Tanzania plans to deploy its Air Bus A220 whose delivery is expected before the end of December.

"Our saving grace is to create a system that will allow us to compete with Ethiopian, Qatar and Rwandair," said Mr Mikosz.

In July, Air Tanzania chief executive Ladislaus Matindi said that the country was expecting delivery of two A220-300s, msn 55047 and 55048, from Airbus towards the end of the year to bolster its regional routes and launch new destinations on the continent.

Already, Air Tanzania has since August been flying the Bombardier Q400 to Entebbe and Bujumbura, while RwandAir also uses the same aircraft to Nairobi, Entebbe, Bujumbura, Dar es Salaam and Juba.

It however compliments the Bombardier with its Boeing 737-800, Boeing 737-700 and the CRJ900 on these routes too.

The Kenya Civil Aviation Authority director general Capt Gilbert Kibe also confirmed that the authority is expecting an application for the Dar- Nairobi route from the Tanzania national carrier sometime next year, upping the game for the Kenyan national carrier.

Ethiopian Airlines on the other hand deploys its 737-800 on several regional routes, occasionally using the wide-bodied Dreamliner 787 to Bujumbura, Kigali, Arusha and Dar es Salaam, upping competition for the regional market.

Meanwhile, KQ and the Kenya Airports Authority are still negotiating a joint venture strategy expected to place the airline on a near-equal footing with major competitors flying in and out of its Nairobi hub.

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