Rapid expansion charts growth with plan to serve every inhabited continent by 2017
26th May 2013 Dubai, UAE: As a part of its 10-year strategy, Kenya Airways plans to connect Africa through Nairobi, to North America (USA and Canada), South America and Australia. While these three continents will give Sub-Saharan's Africa's second-largest airline by seat capacity a global presence, its future is likewise pegged on Asia.
Over the next 10 years, the carrier plans to launch seven new routes into China, six in the Indian Subcontinent and three across North and Southeast Asia. With its growing presence in Europe and the Middle East, Kenya Airways is poised to become Africa's largest carrier and one of a few airlines to serve every inhabited continent in the world.
Having celebrated its 36th anniversary recently, Kenya Airways has achieved several key milestones that include a strategic partnership with KLM in 1995, an Initial Public Offering in 1996 and the Rights Issue in 2012. Such achievements have seen the airline create jobs and contribute towards the development of the Kenyan economy.
Today, Kenya Airways' expansion continues to play an integral role in connecting many African countries to the world, with the carrier's growth seen as a symbol of Africa's emergence as an economic force on the world stage. As a result, Kenya Airways has, over the years, garnered several major global travel industry awards and accolades.
In terms of passenger safety, Kenya Airways has consistently maintained high standards during the course of its history. In 2005, Kenya Airways received the IATA (International Air Transport Association) Operational Safety Audit certification, which made it the first airline in sub-Saharan Africa to have complied with the industry's global safety standards.
The 10-year growth plan codenamed Project Mawingu – from the Swahili word for clouds – is aimed at operating 119 aircraft, representing a significant increase from its current fleet of 42. It is likewise aimed at increasing its destinations from 58 to 115 routes in 77 countries in six continents by 2021.
In 2007, Kenya Airways joined Sky Team, a global network of 19 international carriers. Through the network, the airlines cooperate in providing service, easing connections amongst them, thus making flights smoother and more simplified which provides seamless travel for passengers. Through Sky Team, Kenya Airways is able to offer its passengers service from 1000 airports in 187 countries.
Mr. Abraham Joseph, Regional General Manager, South Asia, Middle East and North Africa, said: “The Middle East has seen considerable growth in aviation in the last few years. The Gulf region has provided great opportunities for growth especially to the African continent. Currently, we offer 10 weekly flights from Dubai to Nairobi, with excellent connections to the rest of Africa. We also have three weekly flights from Dubai to Hong Kong, with immediate connections to Manila and other South East and Far East destinations.”
He further added, “Our Jeddah flights will start on the 2nd June 2013 with two flights a week, and flights to and from Abu Dhabi will start with three weekly flights from the 2nd of July. We also recently signed a code share agreement with Etihad which will enable us to work together in developing traffic from the Middle East to the African continent. By mid-2014, we have plans to start flying to Beirut three times a week.”
Other value-add services introduced by the airline recently include the Msafiri Gold Card that will see cardholders accumulate frequent flyer points for any purchases made thru Visa points of sale worldwide.
Kenya Airways' 10-year plan will see a significant increase in new aircraft. To date, it has firm orders for nine B787s ( with 20 on options) and three B777-300ERs for which delivery starts in the first quarter of 2014. In addition, the company plans to expand its narrow-bodied fleet, subject to further orders, which will facilitate expansion across Africa and the Middle East. Most notably, Kenya Airways envisions operating 32 787s by 2021, which will eventually become the carrier's workhorse.
Kenya Airways is also planning a sizeable freighter aircraft fleet expansion. Having recently taken delivery of a Boeing 737 freighter aircraft (the first of three), the company envisions having seven 777-200LR freighters in FY2020/21. It also intends to expand its 737-400 fleet to five, giving the airline a dedicated freighter fleet of 12.
To facilitate its route and fleet development, Kenya Airways estimates it will need approximately US$3.7 billion in financing over the next five years. Much of this will be provided through cash flows and traditional sources of finance such as loans and capital markets.
Kenya Airways is a listed company with 30.94% of its shares controlled by individual shareholders. Local strategic investors hold another 14.2% and foreign investors control 5.84%. However, it also has secure backing from KLM, which owns 26% of the airline, and from the Kenyan Government, which has a strategic 23% stake. KLM's share in Kenya Airways was a major part of the carrier's accession into Sky Team in 2010, a move that has cemented its place as one of Africa's leading carriers.