The following analysis by Mohammed Hersi was first published in the Business Daily.
Last week, Finance secretary Henry Rotich and industrialist Chris Kirubi were on TV discussing Kenya Airways matters.
While it’s agreed that KQ is in trouble and needs help, I was shocked by two suggestions fronted by Mr Kirubi. First, he said JKIA is allowing too many airlines into Nairobi and asked why these airlines should be allowed to ferry people, say to Dubai, while KQ flies half-empty.
Strategy, price and customer care, among other factors, are what drive people to choose other airlines. Author Stephen Covey calls this line of reasoning scarcity mentality.
When you see life as having only so much, as though there were only one pie out there. And if someone were to get a big piece of the pie, it would mean less for everybody else.
But there is plenty for all. These other airlines are ferrying people into Nairobi who connect to the rest of Africa using KQ.
Banning other airlines will kill JKIA as a hub. Kirubi should read about the history of Emirates Airlines. In 1985 Gulf Air gave an ultimatum to Dubai – either slash the number of airlines into Dubai or they pull out.
The Dubai leader refused to stop other airlines, Gulf Air pulled out and overnight lost 75pc of traffic. Emirates was born out of necessity. It started with two aircrafts leased from Pakistan Airlines. The rest is history.
Protectionism will never ever take us anywhere. This is what is killing Mombasa. Rwanda is soon unveiling a world class airport and if we don’t get our act together, Kigali will be the new hub of East Africa.
Secondly, Kirubi said that all agents must book 50 per cent to remain licensed. This is a 1970s solution to a 21st century problem. We are in a free market; besides KQ’s woes is not revenue. They made Sh110 billion revenue up from Sh106bn. The problem is cost.
Emirates, Ethiopian and others are not the problem. These airlines built their fleet slowly but surely. Before any bailout money is release, we need a forensic audit by an independent audit firm.
If nationalism alone was enough to make an airline successful Nigeria Airways would be ruling the skies. The problem is inside KQ, not outside. And yes, KQ can soar once again. Kirubi is a serious opinion leader and if we remain silent someone may just take his advice as the right thing to do. Locking other airlines from JKIA would mean killing it as a hub. One other observation what was the hurry to buy the Embraers and I noticed that no serious airline in the world has bothered to buy them so I am also very concerned what will happen the day they decide to retire them. If leading airlines cannot buy brand new Embraers who will buy second hand Embraers from a developing country? Please note Embraer is known for private jet NOT commercial airliners. I am for KQ to do really well, as tourism player and as a Kenyan, hence we must address the Elephant in the room..
