The President of Kenya has approached Delta Air Lines during a trip to Washington, DC hoping to entice the Atlanta-based carrier to invest in beleaguered Kenya Airways, which has not been profitable in over a decade.
In Washington, President of Kenya Asks Delta Air Lines To Invest In Troubled Kenya Airways
Kenya Airways last posted a profit in 2012, earning $15 million in profits. Since then, it has not posted a single annual profit. On the contrary, the losses have widened. For the first half of 2022, Kenya Airways posted a net loss of $82.4 million. Since 2012, total losses have been $585 million.
While mismanagement and poor investment decisions have characterized the airline for years, the carrier blames the pandemic for its recent woes, lamenting that it lost about $1 million per day during the period it did not fly due to COVID-19 restrictions. More recently, a four-day strike by pilots cost the carrier $2.5 million per day. During that period, revenue has fallen 58.9% and several taxpayer bailouts have failed to help turn things around.
In a nation in which the flag carrier is state-controlled, Kenya’s new President, William Ruto, has personally met with officials from Delta Air Lines this week in an attempt to forge a closer partnership. Specifically, Ruto and his officials met with Delta’s Vice President for External Affairs Peter Carter.
In Washington, D.C., held discussion with Peter Carter, the Executive Vice President – External Affairs at the Delta Air Lines; talks focussed on building partnerships to make both airlines competitive and attractive. pic.twitter.com/6xzFMwWuQo
— William Samoei Ruto, PhD (@WilliamsRuto) December 15, 2022
Kenya’s Transport Minister Kipchumba Murkomen has made the goal clear: no more taxpayer bailouts.
“We are doing everything possible to ensure that we no longer subsidize the airline and that is why we are looking for a strategic partner.”
That spells a huge problem for the carrier, which has pension obligations and maintenance fees it has struggled to fund. While Delta may represent the carrier’s last and best hope, Air France-KLM has already infused the airline with cash and a strategic partnership that has not solved the underlying problems.
CONCLUSION
The President of Kenya has asked Delta to invest in Kenya Airways. As losses mount, the carrier is increasingly desperate to find new sources of revenue.
I’ve flown Kenya Airways four times this year…all four flights were late, though all four flights were pleasant onboard. I would love to see Kenya Airways succeed, especially since South African Airways has floundered. Even so, I do not see a viable path forward. That is why I am not expecting much from Delta.
image: @WilliamsRuto / Twitter
I’ll hand it to the leadership at KQ, it seems like they recognize that they may not have everything the need to run a profitable airline and are looking for help. If Ethiopia can have a respected global airline, Kenya should be able to as well. There’s plenty of demand to Kenya, there’s a burgeoning middle class, and aren’t they supposed to be a developed country by 2050? Unfortunately, even if KQ were to become profitable, I’m not sure it would ever be an attractive investment for DL. Maybe AF/KL?
Delta owns 49% of Virgin Atlanta, and its still a basket case…..why get involved in Kenya.
To my mind, the only viable way forward for KQ is collaboration with South African Airways, which seems to have been able to secure a fair amount of funding and is gradually rebuilding its regional network. Despite belonging to different alliances, the two airlines already have a strategic cooperation framework in place, and it was seems sensible to try and build on that (e.g. to attract new investment through leveraging the partnership and the recent deal for visa-free travel between the two countries ) as opposed to hoping to be rescued by a company on the other side of the world which only has a handful of routes to Africa.
Obviously that ‘was’ shouldn’t have been there!
Kenya Airways desperately needs an Airport Terminal in Nairobi to be fit for purpose, to allow seamless transit for international passengers as well as those terminating in Kenya.
I recently boarded for Gate 19, bussed to Gate 17 and then walked up the steps to the Jetbrudge and boarded the aircraft. This is normal at Nairobi, and gets worse during the morning and evening peak.
A better passenger experience within the Terminal would support a better travel experience on Kenya Airways.
I may be wrong but as much as it may appear trivial, KQ can source for cheaper supplies within Kenya. One of the biggest cost is its supply of food n other reusable. The cartels used in sourcing for every service n product that KQ consumes is the 1st place to start in working things out. KQ does not need bailouts or partnerships. It just needs a corrupt free environment to operate from. KQ problems start and end in Nairobi. They are not external