Kenya Airways plans to double down on cargo as pandemic hits its passenger business, which is not expected to recover until 2024. Its Chief Executive Allan Kilavuka told a recent investor briefing.
The national carrier, whose joint venture with Air France KLM is expected to end in September 2021, said its peak travel season was severely hit after the country locked down its airspace, causing KQ to suffer a $330 Million loss.
According to Kilavuka, KQ’s passenger business is expected to normalise by 2024, the current fluid situation dependent on several factors, he told Reuters after an investor briefing.
Kenya Airways plan for cargo business
To counter the adverse effects of COVID-19 on its passenger numbers, KQ is placing its bets on the outbound cargo by pushing its market share to 35% by 2025 from 10%.
Kenya Airways is planning to convert its second Boeing 787 plane into a cargo freighter to lift cargo from Europe, Asia and the USA. It converted the first plane in 2020.
The airline plans to acquire two more Boeing 737-300 freighters to fly cargo around African destinations. This will happen once the airline’s bigger planes have ferried the cargo to Africa.
Kilavuka said the ongoing shortage of cargo planes in the market was due to other airlines jumping into the cargo business to survive the pandemic effects.
Kenya Airways whose loss for 2020 tripled to KSh36.57 billion (US$333 million), has turned to the government for cash to bail it out.
Kenya’s government, which has a 48.9% stake in the airline, has budgeted KSh 28 Billion in cash assistance, Kilavuka said. Some KSh6 billion had been disbursed by the end of 2020.
In the long run, Kilavuka said KQ would have to merge with other carriers to remain afloat, citing players such as Delta Air Lines and British Airways owner IAG, which have already taken this option.
Kenya Airways is said to be in discussions with several airlines to forge partnerships after its joint venture with Air France KLM ends.
Kilavuka said that KQ is open to similar ventures or even mergers in the future.
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