With the assistance of its close ties with KLM, Kenya Airways is poised to become the first associate member of SkyTeam later this year.
The East African carrier is enthusiastic about the new opportunities opening up for it as a result of the recent Air France/KLM merger. KLM, which has owned 26% of Kenya Airways since 1996, is set to join SkyTeam in September, and its African partner has officially applied to become one of the first associate members of the alliance.
Meetings have already been held in Paris between the three carriers to discuss the necessary requirements, which Kenya Airways will meet in time to enable it to join in November, says commercial director Hugh Fraser.
The carrier has been encouraged by the positive response from Air France towards future co-operation, especially in West Africa. Kenya Airways has already established a number of routes to the Francophone area, including obtaining fifth-freedom rights between Cameroon and the Ivory Coast. Fraser sees further potential in Central and West Africa, an area where Air France is strong. He also sees an opportunity to open a service to Paris, saying that the agreement with KLM on its Amsterdam hub does not preclude Kenya Airways from serving the French capital.
As it prepares to step into the alliance arena, enhanced revenue generation and tighter cost control has enabled Kenya Airways to reverse the declining profit trend of the past two years. In its financial year to 31 March 2004, Kenya's de facto national carrier posted a net profit of KSh1,302 million ($16.3 million), three times that of the 2002-3 figure.
The carrier has halted what its chairman calls "leakage", by rooting out inefficiencies and reducing staff numbers accordingly. Part of the process of streamlining the carrier has been the discontinuation at the end of March of its Kencargo venture with KLM and Martinair, and the reintroduction of the in-house Kenya Airways Cargo brand, and bringing its domestic subsidiary Flamingo Airways into the mainline operation. "Flamingo was a serious loss-maker," says Fraser. The domestic network will also be restructured to provide essential feed to Nairobi and Mombasa from the main tourist points of Kisumu, Malindi and Lamu.
In May, the carrier took delivery of its first Boeing 777-200ER, to meet traffic demand on its London service, which grew by 7% last year and generated 22% more revenue. Two further aircraft will be taken by the end of the year. Next in line for replacement are its three older 737-200s, but no timetable for their disposal has been set. Many African routes have now outgrown the 737, forcing the airline to look at larger types.
GUNTER ENDRES LONDON
Source: Airline Business
