Following the week’s robust discussion over Kenya Airways, I have crystallized the enlightening conversations into observations rendered in point form thus:
1. Kenya Airways is a private company.
The government of Kenya is one of the many shareholders. It has the largest shareholding at 48.9 per cent. Others include a syndicate of banks called KQ Lenders Company at 38.1 per cent, KLM-Air France 7.8 per cent, KQ employees 2 per cent and the rest held by private owners.
2. KQ planes are not owned by individuals.
The airline runs its fleet on two types of leases: finance leases, which are essentially a form of hire purchase. At the end of the finance lease, the planes will eventually be fully owned by the airline. Operating leases which is a form of rental of equipment (aircraft) for a specific period and at a specified monthly charge. When these leases expire, the planes revert to the leasing companies.
3. Finance and Leasing companies are not briefcase affairs but reputable international companies.
KQ has previously been financed by top banks including Citibank, JP Morgan, and Nedbank among others. It has leased its planes from Aviation Capital Group, Nordic Aviation Capital and Aercap just to mention but a few.
4. Fleet acquisition is not a spur-of-the-moment decision.
It is an intricate affair that takes into consideration many factors. Some of these factors include ease of training of both cabin and flight-deck crew, and acquisition of service parts and destinations served by the fleet. KQ has Boeing 737s, 787s and Embraer 190s.
Why Kenya Airways is abbreviated as ‘KQ’ and not ‘KA’
5. Service components have been in short supply globally for two reasons:
The Covid-19 pandemic which caused many Original Equipment Manufacturers to either scale down on production or shut shop altogether. Second, the Russia-Ukraine war. Many aircraft parts are made of titanium. Ukraine holds 20 per cent of global titanium reserves. Removing it from the equation has had ramifications across the entire world.
6. KQ’s fleet of Boeing 787s has been most affected by these global supply chain constraints.
Manufacturers give preference to carriers with either newer aircraft or huge fleets. KQ has resolved this problem by signing an agreement with Lufthansa Technik for total component support. It has eased the disruption experienced in the first quarter of the year, occasioned by delays in planes returning to service after scheduled maintenance checks.
7. KQ’s fleet is optimized.
This means it is stretched to the limit when it comes to routes that it serves. This is both a great thing and a disadvantage. The advantage is in the fact that all the equipment (aircraft) is utilized fully with more planes in the air than on the ground at all times.
This is within a very heavily regulated environment in terms of safety and security. KQ scores tops in both accounts. The disadvantage is in the fact that when a plane delays in returning from scheduled maintenance checks, a large part of the network is disrupted.
8. KQ has announced today that it has leased a plane to ameliorate the disruption to its network.
This aircraft will not only augment the fleet’s service but also act as a redundancy plane that fills in any gaps in the network. Barring other exogenous factors, flight disruptions should now be a thing of the past.
9. KQ is not an expensive carrier.
Like many international airlines, it operates a hub and spoke model. Nairobi is the hub. Other destinations it flies to are the spokes. For virtually every commercial passenger carrier, direct flights from hub to spoke and vice versa tend to come at a premium.
Any flight coming from a spoke and transiting through the hub tends to be cheaper. That’s why a direct flight from Istanbul to Nairobi on Turkish airlines is twice the cost of one transiting through Dubai on Emirates or through Doha on Qatar.
10. African destinations are more expensive because of restrictive controls that become a barrier to air travel.
Some of these include customs tariffs and unreasonable visa demands. Further, the cost of operating an airline in Africa is 4 times that of other continents. This is because of the lack of infrastructure in many countries.
For instance, some jurisdictions lack basics like security that conforms to International Civil Aviation Organization standards. In such places, KQ has to foot the cost of its own security. Also, passenger service charges tend to be inordinately high on the continent. Uganda and Tanzania charge USD 110 per passenger. Europe charges a paltry USD 6 dollars.
11. The so-called bailouts are necessary for every legacy carrier, especially in this post-covid phase.
Emirates Airlines has in the past couple of years received USD 4 billion in a bailout package. Singapore airlines has received USD 19 billion of the same whilst American carriers have collectively benefitted from a boost of USD 56 billion.
KQ needs USD 2 billion. It is yet to receive it. Spare a thought for the board, management and employees who have to operate in extremis to keep the national carrier flying. These are real shujaas that should be celebrated and not castigated for factors that are beyond their control.
12. Finally, KQ is not perfect. No organization ever is.
It has its flaws. Some of these flaws have been remedially addressed succinctly. Some are still works in progress. Still, there are others that will slip through the cracks causing great inconvenience to KQ customers.
No doubt, these flaws are regrettable. But in all these, one thing stands out; that for every grouse against the national carrier, there are at least 7 other voices that vouch for it. There is a huge army of Kenyans and foreigners who believe in KQ to the extent that they are willing to endure some inconveniences as the carrier gets its act together.
Yours truly is one of them. KQ is not going down. Not by a long shot. That belief and pride in a quintessentially Kenyan organization is the zeitgeist that has separated us from others whose airlines have failed. Unapologetically Kenya Airways for life! Long live the Pride of Africa!