Kenya Airways: A Trailblazer in the African Skies

Kenya Airways has finally matured into Africa's first world-class airline.


Kenya Airways has finally matured into Africa's first world-class airline. While taking delivery of Africa's second Boeing 777-200 ER, Africa's best airline for 2004 introduced its new corporate colors and logo signaling its new status.

Renovation

With the recent renovation and expansion program of its Nairobi hub at the Jomo Kenyatta International Airport (JKIA), the Kenyan flag carrier has invested heavily in new technology and modern fleet. April marked one year since the reorganization of Kenya Airways that resulted in the formation of the airline's cargo division - Kenya Airways Cargo (KQ).

KQ was formed after a share buyout by Kenya Airways of stakes from Martin Air and KLM Royal Dutch Airlines, with a 20 percent stake each in KenCargo Airlines. Kenya Airways, however, maintains a strategic and commercial cooperation with the pair. Managing Director Titus Naikuni, KQ, says the formation of Kenya Airways Cargo was part of the ever-changing demands of the global aviation industry. "Our fleet expansion and modernization program will continue to enhance the cargo capacity needed to grow our cargo business into the future," says Naikuni.

Preliminary unaudited cargo revenues show that the division has made remarkable progress, reporting a revenue increase of 47 percent, nearly Kenya Shillings 4 billion (US$50m), compared to Kes 2.8 billion (US$35m) for the previous financial year. Haulage in tons has also increased as the business registered unprecedented demand due to a boom in regional trade. According to the head of cargo at Kenya Airways, Guy Mertens, a lot of this increase is attributable to the growing balance of trade between Africa, the Middle East and Asia.

The airlines' Commercial Director Hugh Fraser says the closer cooperation between the airlines' commercial department and the new cargo division has been fruitful, leading to aircraft upgrades from the Boeing 737 to the modern wide-bodied Boeing 767 on the major infra-Africa routes such as Lusaka, Entebbe, Harare and Kinshasa. "Our customers have indeed acknowledged this trend and our cargo results are in line with our expectations," says Fraser. He adds that the increased cargo capacity from the larger Boeing 777 would enhance the airlines' capability to operate freighter services for feeding and de-feeding through Nairobi and strengthen Nairobi as the preferred cargo hub in Africa.

Kenya Airways has distinguished itself as a regional airline within the East and Central African region.

With a market share of about 6.8 percent based on total cargo capacity into Europe and approximately 22 percent based on capacity (only scheduled carriers), KQ is quickly establishing itself as a major player in Kenya's cargo industry, the largest and most lucrative cargo market in Africa. While capacity exists for cargo business, there is a challenge for the airline. Mertens says most traders opt to transport their merchandise as excess baggage, meaning cargo competes with this excess baggage, but traders don't mind paying more for it.

This is occasioned by increased insecurity at the airports, particularly in Western Africa. Several traders have been victims of pilferage, and this has caused them to prefer to pay almost double the price for their excess baggage, rather than ferry them as cargo, where they stand to save more than $2 on each kilogram.

To enable the airline to compete with major airlines such as British Airways, Lufthansa and Emirates, the cargo division has moved to strengthen its business by adopting new technology and recently invested in a cargo automation system.

The system, developed by Cargolux, is known as eChamp. Mertens says that customers will be able to log into the Kenya Airways Cargo website and monitor the location of their shipment. It is expected to reduce the workload by hastening processes within the cargo division. This, he says, is a key differentiator for modern cargo freighting.

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