Pe@rson
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Kenya's Growth Over The Next Decade...

Tue Apr 17, 2012 1:19 pm

"...with plan to serve every inhabited continent by 2017."

"24 new widebody points to be opened by 2021 - particularly through using the 787. Of these, 7 are due to be to China and 5 to India."

"Narrowbody expansion to open 40 destinations across Africa, Middle East" - including a number of smaller, less-well-known African cities."

"More than tripling its fleet to 107 aircraft, almost half widebodies, in the next decade."


Source: http://www.centreforaviation.com/ana...-inhabited-continent-by-2017-71784

---

Per this report: "Kenya Airways will become a formidable force and help to finally bring African aviation into the world's limelight."

Most intriguing to read this - predictably excellent - article from CAPA. Times are certainly exciting for KQ (and, indeed, ET).



[Edited 2012-04-17 06:23:44]
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RWA380
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RE: Kenya's Growth Over The Next Decade...

Tue Apr 17, 2012 1:55 pm

If things stay stable in Kenya, and no reason to think they won't, I'd expect KQ to become a formidable player in the region. I'd expect KQ to expand in all directions, West Africa, Asia, North and South, with a flight to JFK as soon as it's possible. Their only direct competition of their size is ET, IMHO there is room for growth, I know established roues like LON are low yield, maybe new unserved or underserved cities could be small gold mine routes if KQ does it's homework properly.
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nyc2tlv
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RE: Kenya's Growth Over The Next Decade...

Tue Apr 17, 2012 10:21 pm

The Kenyan government has been lobbying hard to get KQ or LY to provide service between NBO and TLV. They really want to take from ET who has a strong service to TLV from Eastern Africa.
 
EddieDude
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RE: Kenya's Growth Over The Next Decade...

Tue Apr 17, 2012 10:45 pm

Quoting RWA380 (Reply 1):
ith a flight to JFK as soon as it's possible.

According to the article, the only flights to destinations in the Americas in the pipeline are to YYZ, IAD and GRU. I find it strange that JFK is not there too, but I guess this means that KQ has chosen to rely on SkyTeam connections for service to New York for the time being?

The article is excellent as Pe@rson mentioned. It is very comprehensive and I think it is great that a thread on it has been started. There are lots of issues in the article that make for interesting discussions.

One of the things that amazes me the most is how detailed KQ's plans through 2021 are. I don't know if many airlines have such a clear idea about their expansion plans spanning 9 years and, even if they do, I don't think they would want those plans to leak to the public or the media.

I have some doubts with respect to KQ's choices such as PRG (which seems to me like flying to a SkyTeam hub just for the sake of it being a SkyTeam hub). Why not MAD, which is a UX hub and could provide one-stop connections to cities in the Iberian Peninsula and in LatAm.

I also wonder why BER and not FRA or MUC. Or why KUL and not CGK, which is a future SkyTeam hub.

While this is all very exciting on paper, I must say I feel a bit skeptical about the large number of destinations that KQ plans to serve in China and India. I understand the role of China in the African continent at the moment (and how this role will continue to be played), but we do not see many other non-Chinese carriers offering so many destinations in China.

I don't want to be misunderstood. I am a big SkyTeam fan and I am excited about KQ's plans, but I have to wonder if they will actually be able to fulfill all these plans.
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lexer
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RE: Kenya's Growth Over The Next Decade...

Wed Apr 18, 2012 11:36 am

Quoting EddieDude (Reply 3):
Why not MAD, which is a UX hub and could provide one-stop connections to cities in the Iberian Peninsula and in LatAm.

Cuz that would cut into connecting traffic to Latin America of KLM. No smarts in being a feeder for the competition.
 
ETinCaribe
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RE: Kenya's Growth Over The Next Decade...

Wed Apr 18, 2012 2:07 pm

Pe@rson - thanks for posting this. The customary great writing by CAPA.

Quoting EddieDude (Reply 3):
According to the article, the only flights to destinations in the Americas in the pipeline are to IAD and GRU. I find it strange that JFK is not there too, but I guess this means that KQ has chosen to rely on SkyTeam connections for service to New York for the time being?

Agreed Eddie. IAD in particular does not too much sense to me. JFK or ATL would be better for them. Even ET doesn't have a year around daily flight to IAD even though there is a huge Ethiopian community in the DC Metro area. ET, MS and KQ.
SA)">DL was also planning flying to NBO from ATL, so perhaps KQ can do that for them, not sure if the FAA will still deny such a request.

Quoting EddieDude (Reply 3):
While this is all very exciting on paper, I must say I feel a bit skeptical about the large number of destinations that KQ plans to serve in China and India. I understand the role of China in the African continent at the moment (and how this role will continue to be played), but we do not see many other non-Chinese carriers offering so many destinations in China.

I again agree. True, this battle will be won or lost mostly on the Africa-Asia routes, that is where the big growth will be. Perhaps they are thinking in terms of a low frequency, one stop (e.g. via BKK) routing?

Quoting EddieDude (Reply 3):
One of the things that amazes me the most is how detailed KQ's plans through 2021 are. I don't know if many airlines have such a clear idea about their expansion plans spanning 9 years and, even if they do, I don't think they would want those plans to leak to the public or the media.

I was also shocked to see the details, pleasantly surprised. Many I would think will guard such info close to their chest.



Some other interesting observations:

- All Boeing fleet. that was a surprise to me, and perhaps the first time it has been reported. Orders have not been placed yet though.

- Many 3x week flights, so the inverse of ET is trying to do (increase frequency, not open new destinations with low freq)

- Cargo is slated for huge growth - going from 0 aircraft in 10/11 (they have one 744F as of a couple of months ago) to 12 plane dedicated cargo fleet. Cargo is huge in Africa so smart while belated move by KQ. (ET extracts over $200M every year from Cargo)

- KQ tries IMHO overextends itself. being a 6 continent airliner is great IF it is makes business sense. I am not convinced some of the proposed destinations make sense (e.g. Perth, Prague)

- No mention of MRO. Could be a growth area.

- The growith trajectory has been: Phase 1: grow in Africa (done - 45 destinations) Phase 2: grow in Asia (under way) Phase 3: grow in Middle East and Cargo (starting) Phase 4: DOuble down on Asia + more expansion to all corners of the world. I think unless Sky finds a common solution, Star can torpedo this plan with:
ET as direct competition + JV in West Africa (ASKY and others) + JV in Central/Southern Africa (Korongo in DRC, ET/MS/SA carrier in Zambia) + Additional operators in Ghana (see MS/ET initiative in ACC) + the Nigerian wildcard (who knows what will happen there).
Star can literally encircle KQ and pose it some serious challenges. Good news is the market is big enough for all today, but I am not sure it will remain that way going forward. So IMHO, Skyteam has to take a sheet out of Star and look for its own JV in West Africa to hedge its bets against a East Africa only operation. What do you guys think?

Here is the link to the MS+ET initiative in ACC: http://atwonline.com/airline-finance...011-will-open-new-routes-2013-0413

[Edited 2012-04-18 07:18:12]
 
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yellowtail
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RE: Kenya's Growth Over The Next Decade...

Wed Apr 18, 2012 10:05 pm

This is all fine and dandy but what will they do with the NBO hellhole of an airport.
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ETinCaribe
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RE: Kenya's Growth Over The Next Decade...

Thu Apr 19, 2012 4:01 pm

Quoting yellowtail (Reply 6):
This is all fine and dandy but what will they do with the NBO hellhole of an airport.

Indeed, that is a big hurdle for their planned growth. But KQ CEO and Kenyan president say not to worry:

"Kenya Airways Managing Director Titus Naikuni said this follows a directive by President Mwai Kibaki for the Kenya Airports Authority (KAA) to allow more Public Private Partnerships (PPP's) for the expansion of the airport."

See: http://allafrica.com/stories/201204190323.html

Bottomline: KQ will have to lead to get the new terminal built (lead with $$$) or else it may not get done. One more thing to worry about.

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