KQ to know if New York route viable year-end

KQ to know if New York route viable year-end

Kenya Airways #ticker:KQ says it will know whether the New York route is commercially viable at the end of the year following resumption of flights cut short by Covid-19.

KQ told Parliament that it is currently flying to the US city twice a week compared to seven days in the year to March 2020.

“We are currently doing a cabin factor of 55 percent of our flights capacity and flying twice a week as opposed to seven days,” Alan Kilavuka, KQ’s chief executive told MPs.

Mr Kilavuka said KQ is currently doing 60 percent load factor (belly cargo) compared to 100 percent before the pandemic-induced headwinds halted flights.

“We don’t think the route will be profitable in 2021. Flights have not resumed fully because we are doing 55 percent cabin factor and 60 percent load factor,” Mr Kilavuka said.

He said the earliest KQ can determine whether the route is profitable or not is either late this year or next year.

“We started flights to New York late 2018 and we flew in 2019 but the same was cut short by Covid-19 where we did not fly most of 2020,” he told the Public Accounts Committee.

Mr Kilavuka was responding to a question by Gatanga MP Joseph Ngugi who sought to know if the New York route is profitable to KQ in the wake of coronavirus.

Kenya Airways started direct flights to the US in October 2018, cutting the journey to 15 hours on the long haul route tapped as part of an effort to revive the airline’s fortunes.

The airline suspended its non-stop flights from Nairobi’s Jomo Kenyatta International Airport (JKIA) to New York City John F Kennedy Airport, with the exemption of cargo and special repatriation flights, due to the outbreak of Covid-19.

The US route is one of the crucial destinations for the national carrier as it plays a major role in connecting travelers who transit through JKIA.The carrier had forecast its daily direct flights to the US would boost annual revenues by more than 10 percent in 2019 and 2020.The long-haul route aimed to encourage more business and tourist travel, with the US being one of Kenya’s biggest source s of visitors.Asked whether the new air services agreement between Kenya and America that was ratified by Parliament would spell doom for KQ, Mr Kilavuka said the airline will wait its impact.“I don’t think the decision of the House will threaten the survival of KQ,” he […]

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