Kenya Airways: The Staggering Cost of Becoming Number 1 in Africa

Kenya Airways: The Staggering Cost of Becoming Number 1 in Africa

Carrier Needs over $2 billion to become airline of choice in Africa

Details have emerged about the potential cost of Kenya Airways’ drive to become the number one airline of choice in Africa, connecting the continent’s various destinations via their Nairobi hub.

 Only recently did ‘The Pride of Africa’ sign a record breaking deal of 10 firm orders and 16 options with Brazilian manufacturer Embraer, which, should all options to turn into firm orders as, will double the size of the carrier’s current fleet. Also, when Boeing delivers nine 787 aircraft on firm order, it will allow KQ to add more long haul destinations such as flights to the US, India and the emerging tourism markets in the Far East and the South East.

The cost however is mindboggling with figures ranging from 2+ billion US Dollars upwards, according to sources in Kenya. The forthcoming share rights issue by Kenya Airways is expected to create a core fund to finance this growth, but borrowing and retaining profits at the expense of higher dividends will be other avenue the airline will have to use to be able to pay for the ambitious expansion plans.

At the same time there is intensive lobbying going on to have government boost aviation infrastructure at the country’s main airport in Nairobi, where a second runway is a must to roll out the fleet expansion, while more terminal space and parking spaces for aircraft too are required in order to handle the added passenger and aircraft load. Delays by past KAA management are now coming home to roost as capacity constraints are not only hampering Kenya Airways’ growth plans, but also prevent more airlines from flying to Nairobi or just boosting the number of the existing flights.

 Post courtesy Wolfganghthome blog
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KISUMU AIRPORT SET FOR COMPLETION

KISUMU AIRPORT SET FOR COMPLETION

Following news a few days ago that Malindi’s airport construction was nearly complete and the commissioning of the new facilities, i.e. passenger terminal, shops, restaurants and the new control tower was only weeks away, was additional information sent to this correspondent over the weekend that Kisumu’s airport too was now counting down to the end of construction work on terminals, the expanded runway and other facilities.

Catapulted to international fame when President Obama, whose paternal relatives live near Kisumu, was elected to the presidency of the United States, Kisumu has long been in the shadow of other cities and municipalities in Kenya when it came to economic development but its elevation to city status a few years ago and keen interest by domestic and international investors in agriculture, the fishing industry and tourism has changed much of that.

Investments will now see a boost from the new aviation facilities, as larger planes can finally land in Kisumu, also allowing for direct flights from abroad, while connections with Nairobi are now at a record high, with national carrier Kenya Airways operating three daily frequencies while Fly540 and Jetlink too are flying on the route. The longer runway will also at last allow for direct export by air of fresh fish fillets to the consumer markets in Europe and the Middle East, as wide bodied cargo planes will be able to take off with full load to their final destination, similar to the ‘sister airport’ across the lake at Entebbe. This is thought to also open the door for export of agricultural products like fruits and vegetables, which in the past needed to be trucked to Nairobi for processing, giving a boost to agro investments in this fertile part of Kenya.

Some good news at last for the Kenya Airport Authority, which has been struggling with an image of incompetence vis a vis its management of the Jomo Kenyatta International Airport in Nairobi and the slow pace of construction work there.

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Kenya Airports Authority Lying to the Public over Vandalism Claims

Kenya Airports Authority Lying to the Public over Vandalism Claims

The Kenya Airport Authority only managed to pour more fuel into the fire of discontent over their dismal performance of late, when their Managing Director yesterday blamed vandals for the power outages.

Incompetent? Eng. Stephen Gichuki, Kenya Airports Authority Managing Director

‘The man is not only incompetent, and his staff responsible are incompetent too, now they are also lying to us. How can they blame vandalism of cables in a secured area. Has anyone heard of intrusion into the airport perimeter, cutting of fences or climbing them? Had police got any evidence that there was in fact vandalism or that the power substation was broken into? Has KAA filed a case with police? That cable is underground so who can access it from above? And if anyone intruded into the secure area, what does that mean for KAA’s security measures in place? This is pure hogwash and they know it. They are trying to absolve themselves from blame and by lying make it worse. They must resign or be fired for negligence and incompetence. And no, you cannot use my name because these people are very vindictive and can cause our airline a lot of problems’ said a regular source to this correspondent yesterday evening when discussing KAA’s latest attempt to shift blame from themselves to ‘others’ who remain unnamed.

Airlines are demanding huge compensation from KAA for flight diversions and the resulting costs of passengers missing flights and having to be accommodated, the extra fuel to reach diversion airports and related cost caused by a string of recent power outages at East Africa’s most important international aviation gateway. Meanwhile is a crippling electricity deficit of up to 200 MW causing power rationing across Kenya, following suit to Tanzania’s perennial power shortages and of late similar problems in Uganda, leaving businesses, in particular the hotel industry and manufacturing reeling from the added cost of doing business by using in house generators which at present prices of diesel and petrol are eating deep into their bottom line.

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Finally, Kisumu International Airport set for Global TakeOff

Finally, Kisumu International Airport set for Global TakeOff

The third busiest airport in Kenya has seen a transformation from domestic to international standards, raising hopes it will spur regional economic growth and lower the historic poverty levels.

Kisumu Airport had been serving just ten airlines flying domestic routes and only carrying passengers.

In October 2008, the expansion and the upgrading of the airport began, with a total of Sh3 billion being set aside by the government and the World Bank to improve the strategic airport.

The runway, which was initially 2.1 kilometres was extended a kilometre longer, while its width was extended by 15 meters to accommodate larger planes.

The airport’s apron has also been expanded, and a new terminus that can attend to up to 700 passengers per hour was built. The terminal has the ability to check in passengers for eight flights simultaneously.

Although the airport was intended to be completed in 22 months, construction works were delayed due to constant wrangles between the Kenya Airports Authority and members of the clan, who live in areas surrounding the airport.


The completion of the construction works at the airport sparks new hopes for investors in the western region, who are optimistic that the expansion and upgrading to international standards will boost the region’s economy by opening up new business opportunities.


 Farmers and businessmen have started introducing new crops, products and investments in preparation for the commissioning of the airport and introduction of cargo flights.

Earlier this month, the authority unveiled a new raft of investment opportunities, which included provision of aviation fuel, ground handling services and the management of an automated car park.

“We are now focusing on enhancing new business opportunities and encouraging people to open up more,” KAA managing director Stephen Gichuki said during a stake holder’s business forum in the lake side city.

After commissioning, Kisumu International Airport will have large aircraft like the Boeing B737 and B767 landing safely.

The third busiest airport in the country has recorded steady growth in passenger numbers. In December last year, passenger numbers increased to 24,271 up from 16,989 in 2009.

The expansion which has lasted two years is expected to offer an estimated 30,000 jobs and boost bilateral trade.

Apart from the direct earning expected from businesses and employment, Nyanza Province and the whole of western region expects to receive a higher number of domestic and foreign tourists.

Locals also enjoy enhanced security while value for land adjacent to the facility has appreciated tremendously.

Several construction projects have also sprung up around the facility while numerous hotels have been built or are under construction within and around the lake side city.

Even nearby towns like Ahero are now feeling the growth ahead of the commissioning of the new facility which will greatly open up the region for serious business with the rest of the world. Fish, horticultural products will now be exported directly to Europe and other world markets.

During a visit to the facility earlier this month however, the PS Cyrus Njiru of the Ministry of Transport said that the facility will not hold cargo flights yet, but collaboration between several stake holders would speed up cargo handling facilities and the emergence of cargo flights.

“The second phase of the airport expansion will concentrate on handling cargo flights, being the biggest need of the area that requires economic growth and poverty eradication” Mr Njiru said.

“We can now proudly say that the airport expansion and upgrading has been successful despite the various challenges that the Ministry and the Kenya Airports Authority faced” Mr Njiru said.

The PS attributed the delay in completion to the need to meet international standards and expectations of travellers, now that the facility was being transformed.

“The government needed to deliver a fist class international airport and fit it in the class stipulated by Vision 2030,” Mr Njiru said.

Kisumu Airport Upgrade Project On Schedule

Kisumu Airport Upgrade Project On Schedule

The serene lakeside city of  Kisumu is about to have an international airport soon following upgrades undertaken by the Kenyan government.The extension of the Kisumu Airport runway and expansion of other facilities is going on according to plan. According to the airport manager, Mr Joseph Okumu, the project is halfway through and right on course.The project is expected to be complete by August.
         
Kenya Airports Authority is extending the length of the runway from the previous two kilometres to 3.3km. Initially, the runway was to be lengthened to 3km but this was revised to 3.3km.Kenyan aviation authorities are satisfied with the progress of the project and have confirmed that the extra 300m of the runway will be done, indicating that the Government is working out modalities of completing the added length.

  
Once the project is completed, the airport will handle Boeing 767s, Airbus 310 and 300, bigger aircraft which could previously not land or take off on the shorter runway. The apron area is also being enlarged and this, according to the airport manager, will allow cargo aircraft to land in Kisumu.

Aware that the runway is being extended, some investors are making enquiries about setting up operations at th improved facility. One of the companies, One Jet One, wants to start operating an Airbus 320 in August this year.Some charter flight companies have also expressed an interest in operating from the airport. This is apart from normal concessions like setting up hangars and godowns,according to Kenyan aviation authorities.

             A model of how the Kisumu Airport will look like when completed later this year.

There is a firm that wants to start an aviation training school and a flying school. Other firms have expressed interest in starting ground handling business at the airport. Yet others want to build a five-star hotel at the airport. Thomsons Airways, the third largest airline operator by passenger traffic in the UK, has also enquired about the possibility of operating a Boeing 757 aircraft the lakeside airport.

Situated in the hub of the East African community,Kisumu Airport is expected to become a major aviation hub in the near future,interconnecting the various cities around the lake.

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