A Kenya Airways plane at JKIA. FILE PHOTO | NMG Kenya Airways is contesting a government deal allowing Ethiopian Airlines to operate passenger planes grounded by the coronavirus for shipment of cargo from the Jomo Kenyatta International Airport ( JKIA) in Nairobi to Europe and Asia.
The loss-making KQ has said the new deal will give the rival carrier undue advantage in a period when Kenya has frozen international passenger travel in the wake of the coronavirus outbreak, leaving cargo as the only revenue driver.
On April 6, the Ministry of Transport allowed Ethiopian Airlines to vary its licence for passenger planes and use six aircraft to ferry cargo from Nairobi and Mombasa to overseas at a time when carriers are charging a premium for the service.
Kenya Airways is worried that Ethiopian Airlines will take a huge chunk of the business of shipping flowers, fresh fruits, vegetables like green beans and peas as well as meat that have become increasingly scarce in Europe as the coronavirus pandemic hampers the global movement of produce.
KQ chief executive officer Allan Kilavuka said the carrier was not consulted on the impact that the Ethiopian Airlines deal would have on its business.
The national carrier is banking on the cargo business, which generates about Sh11 billion annually, to pay salaries and utilities like security, water and electricity.
“We have objected the move to have Ethiopian Airlines use their passenger flights for cargo business in Kenya because we were not consulted on the impact that this would have on our business,” said Mr Kilavuka in a phone interview with the Business Daily .
Mr Kilavuka was of the view that Kenya Airways should have been consulted before varying Ethiopian Airlines licences, arguing that JKIA is the hub of the national carrier.
“Anytime you have a carrier wanting to come to your domain, you need to be consulted so that you are not disadvantaged at your main market,” he said.
The State suspended all cross-border passenger flights on March 22, stopping KQ’s foreign flights. The order effectively cut off Kenya Airways’ flow of new revenues at a time when it had no cash reserves.
Last Monday, the government also barred movement into and out of four counties including Nairobi, Mombasa, Kwale and Kilifi, forcing Kenya Airways to ground flights and hinge its survival solely on cargo business.So far, the loss-making Kenya Airways has sought a multibillion-shilling government bailout after the grounding of its planes.Without […]