Why KQ will take longer to fly to New York despite clearance

Kenya Airways Chairman Michael Joseph consults with Company Secretary Catherine Musakali during an annual general meeting in Nairobi. [Wilberforce Okwiri, Standard]

National carrier Kenya Airways (KQ) will take longer before it can fly directly to the US despite having received the green light to do so.

According to the Chief Executive Sebastian Mikosz, there are still a lot of audits and contractual arrangements to be made before KQ can launch the much-awaited flights.

“There are still audits to be carried out. The US has strict requirements and there is a lot for KQ to do on paper. It is a precious opportunity but we have to get it right first,” he said.

Speaking during an annual general meeting at the airline’s headquarters in Nairobi, the CEO told investors that the airline will have to ensure that it has the passengers, not just to take to US but also from US back to Kenya.

“The decision to launch a flight is subject to proper commercial agreements. Opening a connection to fly an empty aircraft is the last thing we want. It is easier on the Kenyan side because we are here and, therefore, easier to collect passengers from East Africa to the US,” he said.

Non-committal

Mr Mikosz was non-committal on the date of the launch but ruled out this year. With the airline struggling to clean the mess of ‘Operation Mawingu’ which saw it acquire airlines and launch new routes before proper market study, he said they are taking the decision with a lot of caution.

“We will be very cautious to launch it. I don’t want to commit any day but it is a top priority for the management. We hope to launch somewhere next year,” he said.

According to KQ Chairman Michael Joseph, the company will have to agree with other airlines on how its passengers will be picked at New York to other destinations. Passengers who want to go beyond New York will need an assurance that there are other flights waiting to take them further.

“It is not the policy of the airline to build a distribution in the US. The same way we have partnered with US Sky Team to distribute their passengers in East Africa is the same way we need commercial agreements on the US side,” he said.

In addition, the board will have to enter into a contract with agents to sell their tickets so that the airline can get business on both ends. Mr Joseph said that the airline was negotiating commercial agreements to ensure that they can sell tickets in the US.

He told the press that even though it may be easy to sell tickets for the US to Eastern Africa passengers, it will not sustain the route if they do not have full planes when coming back to Kenya.

There is also one more audit that needs to be done on the Jomo Kenyatta International Airport to check the security status. KQ will also need to check the implications of the direct flight on its joint venture deal with KLM. It will then set the prices for the route and get terminals in the respective airports

“After this, we will have to put flight numbers in the booking system, which needs to be done six months in advance. Hopefully we go next year but we do not know the date yet,” Mr Joseph said.

Meanwhile, former National Intelligence Service (NIS) boss Michael Gichangi has been appointed to the KQ board to replace one of the two members - Wanjiku Mugane and Ronald Schipper - who retired.

During the fireworks-filled AGM, the board was put to task to explain the progress of the debt restructuring process and if the airline will eventually pay any dividend.

Turn around

“Mr CEO, we can’t give you work to turn around KQ and tie your hands. We don’t care where you get your team from. All we want is you to get us back to profitability and pay us dividends,” said Bethwel Mwaura, a shareholder.

Some shareholders also questioned the date of the Special General Meeting that was convened last month, just a day to the General Election. David Mwangi, a shareholder from Laikipia, termed the date suspect, saying it was only meant to weaken the voice of minority shareholders.

Mr Joseph had to calm shareholders who said that the relationship of KLM with KQ had disadvantaged them. Some shareholders said KLM has turned into a competitor as opposed to being a business partner.

Philip Mathew cautioned the management to be strict to avoid being brought down by corrupt dealings.