Bureaucracy limiting KQ regional growth

September 24, 2010
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, NAIROBI, Kenya, Sep 24 – The continued application of stringent licensing rules by some African governments to airlines operating on the continent is limiting expansion plans by Kenya Airways.

The airline’s Chief Executive Officer Titus Naikuni said on Friday that the lack of bilateral air service agreements in those countries was limiting the airline\’s ability to meet the demand in some routes.

"This is a political business where you must get traffic rights; you must have the governments agreeing for you to fly in. That\’s what limits us as far as some countries are concerned," he said.

The CEO was however quick to add that many governments were increasingly opening up their skies which had enabled them to fly into more African countries which account for 70 percent of KQ\’s business.

For them to continually strive to be the airline of choice, this was however not enough for them, he regretted.

"We need to have proper service, and that service is predictability of the flights and convenience and hence the need for us to start increasing frequencies into a number of countries," he said.

He cited their operations in Lagos, Nigeria where the airline flies once daily adding that a passenger who misses the flight is normally inconvenienced as he usually has to wait until the following day to catch another flight.

Liberalising the airspaces would however give the airline the leeway to increase their frequencies in the various destinations, meet the demand in those routes and exploit the opportunities that they portend.

Despite this setback however, the CEO said they were still pushing ahead with plans to venture into more destinations and add to their current 50.

"We have opened up seven routes and six of them have already broken even. We are looking at opening up another nine routes in the current financial year and that is a continuous thing," Mr Naikuni added.

Speaking to reporters after the carrier\’s Annual General Meeting, the CEO also sought to allay fears that KQ\’s expansion plans would be negatively impacted by the delayed delivery of their Boeing 787 Dreamliner planes which were first ordered in 2006.

The planes were intended to replace their aging fleet particularly the long haul ones while some of their new routes would be serviced by Embraer jets, he emphasised.

"We are getting one Embraer 190 in November and another one arriving in June 2011; this weekend we are getting a Boeing 737 that we are buying from KLM in Europe and we got one extra one that came in a few months ago. So we have enough for the short-haul within Africa," he assured.

Discussions with Boeing, the Dreamliners\’ manufacturer and its rival Airbus from whom KQ had threatened to source the orders are still ongoing, he said.

Meanwhile, Mr Naikuni disclosed that the management was holding talks with COTU and Federation of Kenya Employers over looming strike threats by the carrier\’s unionisable workers.

The workers want an August 2009 agreement signed with the management backdated by 15 months, a demand the airline says is unreasonable.

"To us, this is not right because once you have signed an agreement, you can\’t then re-open it," he said of the deal that was struck between the two parties that saw the workers get an interim 20 percent salary increment.
 

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