Kenya Airways Starts discussions on taking over KAA, plans to hedge fuel prices

Kenya Airways has begun negotiations to take over the management of KAA (Kenya Airports Authority) following cabinet approval last month. KQ’s management confirmed this at the airline’s Annual General meeting held on Friday. The management said the move is part of a recovery effort all while making Nairobi a regional transportation hub.

The airline’s Chairman Michael Joseph said the the partnership would enable them improve operations and elevate the status of JKIA as a regional hub placing the carrier on a near equal footing with airlines such as Emirates and Ethiopian airways which are state owned.

“This is a move I believe will make Nairobi an economic hub for Africa, what it will mean for the performance of the airline I cannot disclose yet, as its goals remain concealed.” noted Michael Joseph.

The carrier plans on opening up the hedge policy by the third or fourth quarter of 2018 and is already in talks with banks and trading houses to restart the hedging.

“Volatility of fuel prices has been tremendous; exactly a year ago when we had the AGM the fuel prices was $52 per barrel as of today it has gone up to $72 per barrel, increasing costs by 25 per cent.” Sebastian Mikosz CEO and Group Managing Director KQ.

“We’re looking at starting out hedging policy, hedging in airlines is an emotionally sensitive because it is perceived as gambling. Hedging should be a conservative policy of buying insurance the same way you buy insurance for your car/house to protect from damage or fire. “He added.

ALSO READ; Kenya Airways Begins Talks to Hedge its Fuel Purchases as Oil Prices Rise

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