KQ eyes breaking even on New York flights in a year
Kenya Airways#ticker:KQ, which recently reduced the frequency of its Nairobi-New York flights from seven to five a week, now says that it expects to break even on the new route in a year.
According to an internal memo from CEO Sebastian Mikosz to staff seen by Business Daily, the carrier is banking on the success of the key route among other initiatives, including a planned takeover of Jomo Kenyatta International Airport (JKIA) to boost its revenues and support recovery.
“It is true that the New York route being a new route for us is yet to be profitable…We anticipate this trend to continue for at least another twelve months before we are able to break even,” said Mr Mikosz in the February 28 memo.
The airline last November announced plans to reduce the number of flights on the route to Tuesday, Thursday, Friday, Saturday and Sunday every week starting January 15, citing low demand during the winter season.
The memo sought to reassure KQ staff, coming just a month after sector lobby Kenya Aviation Workers Union (Kawu) issued a strike notice in protest against Kenya Airways’ planned takeover of JKIA.
While the strike was later called off, tension has remained among employees playing out in the public sphere.
“As this (the Special Purpose Vehicle or proposed subsidiary company) is a separate entity, I want to assure you all that this will not have any impact on KQ staff…. One of the underlying principles of the PIIP is to increase jobs and provide more employment opportunities for Kenyans,” the CEO says.
He further rubbished claims by Mvita MP Abdulswamad Nassir that KQ only owns three planes, noting that the firm has a fleet of 40 aircraft, of which 20 are owned by the carrier.
Three aircraft, he says, have been fully paid for while the remaining 17 planes are on lease.
Kenya Airways is looking forward to merge with Kenya Airports Authority (KAA) as part of a grand plan to deepen the airline’s recovery and cement Nairobi’s status as a regional transport hub.
Members of parliament have however opposed the proposed merger, saying it will render the profitable aviation regulator bankrupt.