You know that KLM owns 23% of Kenya Airways. Now that is least of the problems. With the relationship with KQ, the national carrier is now on the brink of collapse as the exclusive deal with KLM threatens its regional routes.
As KQ faces financials and management problems, KLM is now operating flights to East and West Africa, going against and agreement with the national carrier on route termination. KLM now has two flights per day on the Nairobi -> Dar es salaam -> Amsterdam route forcing Kenya Airways to reduce its flights from 42 a week to just 14 and blame it on some “diplomatic spat” with Dar.
As KLM eats into KQ’s most profitable routes, the Royal Dutch Airline which has seconded a Fleet and Technical Asset Development officer called Rick Sine knowing very well how lucrative aircraft parts business is. Through Rick, KLM has been able to expensively procure spare parts for KQ while the kick-backs and overheads get to the pockets of the Dutch carrier.
An agreement by KLM limiting Kenya Airways’ penetration of Europe, Americas and Asian routes has limited the growth of the Kenyan flag bearer.
Email exchanges between tourism stakeholders showing that JambjoJet prematurely signed agreement with DAC aviation without proper research.
While this is eating onto KQ bottomline, the national carrier has signed a Ksh 100million monthly deal with a British aviation company, DAC Aviation to fly the Ukunda and Lamu. The deal to have DAC fly the routes happened despite DAC not being aware of Ukunda’s airport condition which has not been fully tarmacked.
The exclusive deal has also seen Kenya Airways sack 10 pilots while DAC which they awarded the deal are recruiting new foreign pilots in the UK to fly the local routes. Some of the recruitment information can be found here http://bit.ly/1BF1vmg
While KQ through its domestic arm, Jambojet, is profitable, this is not going to last long as the airline faces turbulence. Already the effects of Kenya Airways competiting against itself on the Eldoret route is showing with passenger numbers dropping. It is not clear why KQ management saw it best to fly both the national carrier and its no-frills arm in some routes.
Most KQ customers are now opting for Fly 540 as the promised savings proves to be cost. 80 per cent of Jambojet passengers book flights 4 weeks in advance or shorter. That means that they pay close to Ksh 3,000 for one way or Ksh 6,000 return. Passengers spend another Ksh 3,000 on airport transfer costs and so the flight end up costing them in the region of Ksh 10,000 for return. That is not a saving to many passengers who would rather take a 4 hour drive to Kisumu. The Mombasa KQ flight cost an average of Ksh 16,000 return.
KQ knowing that Fly 540 is its main competition, has embarked on acts of sabotage on competition. The national carrier has rammed Fly 540 jet twice and even sent KRA to attach Fly 540 assets while knowing very well that the regional carrier is tax compliant. Just this week, KQ personnel rammed one of their tarmac vehicles on a Fly 540 jet causing extensive damage. When the airline pursued the matter and demanded action of the culprit, Kenya Airways claimed that it was a temporary and inexperienced staff whom they refused to discipline.
The sabotage by KQ also saw top executives convince government officials based at then President Kibaki’s office to block the entry of FastJet into the country. As Naikuni and others plan to launch an airline soon, any competition is not allowed and the existing ones are to be crippled through all manner of sabotage including some very crude ones.
Meanwhile JamboJet does not have an Air Operator’s License and so it can only use Kenya Airways flight code KQ. This has seen IATA raise issue with this as each airline should have own code.
Meanwhile, the maintenance cost for the Boeing 737 being operated for the JamboJet routes is eating on to the regional carrier’s bottomline. It is not clear how what made KQ settle on the expensive 737 equipment for the local routes.
As KQ sabotage competition, senior management and board members engages in acts of economic sabotage meant to cripple the national carrier. Wait for the second segment of this KQ mess exposure.
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