Turbulence at Kenya Airways (‘’Pride of Africa’’) and its Impact on the Region

Few things will get you into the travelling mood like Kenya Airway’s inflight theme song by Mutuma. It’s authentic. It’s fresh. It takes pride of place and it is clearly in a class of its own to be celebrated perhaps as one of the best brand songs in corporate Kenya in close rivalry with Safaricom’s inspiring ‘’Niko na Safaricom. But as far as these two of Kenya’s most recognizable brands are concerned, that is as far as their similarities go. Over the recent past, the mobile phone company has come to be described as ‘’the most profitable company in East and Central Africa.’’ Over the same period, Kenya Airways posted some of the biggest losses in this part of the region sending shockwaves all across. Things came to a head with the recent dismissal of long serving Finance Director one Alex Mbugua and the bowing out of its Chairman Evanson Mwaniki. But where exactly did the rain start beating the airline, one may ask?

It cannot be denied that Kenya Airways has had its days in the sun over its 39 year history. It’s a resilience that is to be admired especially when you consider the many ‘national airline carcasses’ that dot the African journey into corporate profitability. Several national carriers succumbed to a combination of factors including mismanagement, inefficiency due to government interference and of course international competition. A June 2005 write-up on KQ by Africa Aviation’s CEO Mr Nick Fadugba read thus ‘’the impressive growth and success of Kenya Airways in the tough international airline industry continues to justify its proud claim to be 'the Pride of Africa.' the very focused and well-run national carrier of Kenya once again was unhesitatingly named 'African airline of the year' at the recent Annual African Aviation Awards ceremony in Mauritius organized by African Aviation Magazine. Kenya Airways won this Award in 1999, 2000, 2001, and, now, 2004.

It is past accolades like this one that make stakeholders furious at the slide of the airline’s fortunes. Because they know what the airline is capable of achieving. In other words, its faded glory is still too good to let it slide into oblivion. What makes it even harder to let go is the ‘’Pride’’ that it has built all across ‘’Africa,’’ from Abidjan to Maputo.

It will be remembered that Kenya Airways was born in the aftermath of the breakdown of the former EAC and its then shared airline the East Africa Airways. Started in 1977, Kenya Airways was for long wholly owned by the Government of Kenya (GoK) until the mid-90s when it was privatized with shareholding being split among GoK, Dutch airline KLM and other private shareholders. The pioneer CEO of the privatized firm, Brian Davies handed over to one Titus Naikuni in 2003. Mr Naikuni had served as Managing Director at Magadi Soda and was also part of Kenya GoK’s Public Service Dream Team in which he served as Permanent Secretary.

Through a combination of strategic partnerships (codeshares), route monopoly, and little competition (until the Emirates, Ethiopian and Qatar airlines of the world landed in town) KQ has over the years rode, rather flown like a Colossus and rightly so… nice brand, good inflight service, the ‘’Kenyannnes’’ coming nicely through its flight and cabin crews with a polished accent…and why not? They were running the flights like Sunny Bindra would say with ‘commitment like their own businesses,’ this as it should be. The Kenyan entrepreneurial spirit coming to life in the air; add to that the centrality of Nairobi as a hub that can connect you to anywhere else in the region and KQ almost had it all.

Then the rain began and you can’t blame it all on management. A fuel hedging plan gone bad, combined with the global financial downturn and the effects of terror activities in the region made for an evil concoction that dealt a big blow to the airline. Effectively, the other airlines, some of them with deep home government pockets, capitalized on KQ’s dwindling fortune and bad PR and went for the kill. Compared to a few years ago, Ethiopia’s Bole Airport now can hardly afford sitting space for its many visitors when they land at peak hours. It’s Ethiopia Airways’ (ET) hub and Ethiopians are known for their patriotism-they will support ET to the last flight and the last passenger. You would be hard pressed to say the same about Kenyans.

Yet KQ’s decline has an even bigger impact. When KQ takes off for Amsterdam, the fruit and flower growers of Makueni, Nyandarua and Kiambu all smile even when they are not onboard the plane because KQ links them to consumers in Europe. The Tanzanite vendor in Dar es salaam and flower farms around Mt Meru in Tanzania, the Copper mines in Ndola and the tourist enjoying the breezy mist from the ‘’Mosi o Tunya’’ of the Victoria Falls are linked to the world through the ‘’Pride of Africa.’’ And all these even before we consider the multiplier effect of these activities.

Currently ranked 3rd in Africa, behind South Africa and Ethiopia Airways both of which are heavily subsidized by their respective governments, in one way or the other, Africa identifies more with Kenya Airways than it perhaps does with any of its rivals on the continent. KQ the brand must not be allowed to die, if for nothing else, for the pride of the continent.

Jackson Kiraka

Consultant- Regional Agricultural Trade Policy

COMESA

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