Did Kenya Airways do due diligence on US route?
SEE ALSO :NSE share index down by 9.56 pointsDespite the anticipation and the marketing undertaken throughout the year, the airline has not been able to fill up many of the flights that came after the hyped inaugural flight. KQ has now decided to scale back the number of flights on the new route - a move it attributed to low demand during the winter season. It will reduce the number of flights this month by 30 per cent to 20. In a statement, the airline said it cancelled flights that are not commercially viable, noting that the move is not unique to the New York route. Grow revenues
SEE ALSO :KQ bid to manage airport opposedIt noted that this was also not unique to KQ but always happens in the airline industry. The airline expects the route to grow its revenues by 10 per cent in the course of 2019. While the management has a year to prove naysayers wrong, it is notable that none of the KQ’s 53 routes – as of December 2017 – contributed revenues on such a scale. The best performers, according to KQ, are Nairobi-London and Nairobi-Amsterdam routes, which jointly accounted for 16 per cent of the airline’s turnover last year. While analysts have hit out at the airline and noted that it should have “done a better job forecasting demand to avoid such a costly miscalculation,” KQ said the decision was reached before it started the flights. It also noted that it had conducted prior research on the route, as is the case with other routes.
SEE ALSO :Ruto tells off MPs on Kenya Airways dealThe route, according to the national carrier, will get traction from travellers who have in the past had to go through Europe. “We conduct market research to ascertain the viability of any route we are considering to open and New York was no exception,” said KQ in a statement. “We have not only connected the two continents but have also given a more favourable option to our passengers who would previously use the one-stop route via Europe and notice that this new routing is a preferred population option which is receiving a lot of positive response.” He noted: “We are addressing these concerns by offering a best practice product – non-stop direct flight; this is the best you can do; no changes, no missed connection, no additional airports.” The airline will focus heavily on passengers plying the route as opposed to cargo. It said cargo on the route would not be enough to warrant deploying a cargo freighter. It will instead use carry cargo in the bellies of the 787-8 Dreamliners that it is using on the route. It will start moving cargo on December 1.