KQ faces bleak future due to increased competition—Mikosz

Outgoing Kenya Airways CEO Sebastian Mikosz during an interview with the Star on September 5, 2019. Increased competition from regional airlines is threatening the survival of Kenya Airways, chief executive Sebastian Mikosz has cautioned, as the airline continues to battle high operating costs that are eating into its revenues.

Uganda is the latest East African nation to join the regional skies with the re-launch of its national carrier, Uganda Airlines, which commenced commercial flights on August 28.

The carrier made a comeback after 18 years. It now operates two flights to Nairobi per day, daily flights to Juba and Dar es Salaam(except Wednesday) and four times weekly to Mogadishu.

This adds pressure on KQ, as it is known by its international code, that is already battling stiff competition from Ethiopian Airlines, which has hived off a big chunk of its continental and overseas markets.

Kenya Airways is also looking at a further threat, RwandAir, the flag carrier airline of Rwanda.

“If we are not careful, RwandAir will eat us alive. They started just the other day and they are growing so fast,” Mikosz told the Star in an exclusive interview in Nairobi yesterday.

RwandAir has had one of the fastest growth in the region, where within the last two years, it has expanded bits regional, continental and global network, eating into some of KQ’s markets such as Chinese destinations.

"In the current state, KQ will continue existing but will lose its market share because the competition is expanding extremely fast. Securing back the lost market share will be extremely difficult,” Mikosz said, supporting the planned nationalisation of the airline.

Air Tanzania, which was revived in December 2016, is yet another threat to Kenya Airways, and an airline that had cemented its position in the region and Africa.

The Tanzanian national carrier has been on an aggressive expansion as it targets key African and international destinations previously dominated by KQ.

Ethiopian Airlines, on the other hand, has been on an expansion spree, which has seen its fleet grow more than three times the current Kenya Airways fleet.“Having countries within East Africa creating airlines is changing the dynamics. We have quite a number of question marks for the future and the challenges that are coming,” Mikosz warned.He cautioned against high operating costs, including numerous taxes that are likely to drag the airline’s turnaround.The Nairobi Securities Exchange-listed airline recorded a 15.6 per cent jump in total operating costs in the year to […]

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