African low-cost carrier Jambojet is hopeful it will finally be permitted to launch international flights from Kenya in 2017 and is once again seeking licences to operate from Jomo Kenyatta International Airport in Nairobi and Moi International Airport in Mombasa to up to eleven markets across the Continent. The airline has previously applied for and in some cases secured rights to fly outside the country, but each time the Kenya Civil Aviation Authority (KCAA) has confined the carrier to local markets.
Among the markets on the carrier’s radar are Bujumbura, Burundi; Addis Ababa, Ethiopia; Blantyre and Lilongwe, Malawi; Kigali, Rwanda; Dar es Salaam Kilimanjaro and Mwanza, Tanzania Entebbe, Uganda; and the Spice Island of Zanzibar. It is also seeking approval for flights to the Democratic Republic of Congo (DRC) and Somalia.
While fellow low-cost carrier has scaled-back its presence across Africa over the past year after a change in ownership and management, Jambojet, a wholly-owned subsidiary of Kenya Airways, sees the potential to grow its budget offering, supporting a strategy to boost the national carriers profitability.
Kenya Airways already serves these markets and it is understood to be supportive to transferring flying to its budget business either fully under a codeshare arrangement or on a split schedule alongside its own flights. “For us this is the next step because we have established ourselves in Kenya already,” said Jambojet chief executive Willem Hondius in a local interview.
Having launched operations in April 2014 the airline believes it has now proved its pedigree in the domestic market and can overcome any concerns of the KCAA to its ability to serve international markets effectively. It currently flies to six destinations from its Nairobi hub — Eldoret, Kisumu, Lamu, Malindi, Mombasa and Ukunda and plans to also add Vipingo, Wajir and Garissa to its network.
Jambojet has struggled financially during its initial start-up phase and Kenya Airways accounts show the business reported a KSh118 million loss (a $1.15 million loss) in the year ending March 2014 ahead of its take-off, increasing to a Ksh287 million loss in the year ending March 2015 for its first full year of flying. However, this has now translated into a Ksh126 million profit for the last full year (end March 2016) and trading is strong in the current year, despite some challenges towards the end of last year due to aircraft operational issues.
In comparison Kenya Airways as a whole reported an operating loss of Ksh4,093 million for the last financial year, a significant rise of 74.9 per cent that was partly driven by an ambitious fleet and network expansion across the latest decade. A reduction in capacity of around five per cent in terms of available seat kilometres in the same year has attempted to reverse the downward trend.
Jambojet currently operates a fleet of two Bombardier Dash 8-Q400 turboprops and two Boeing 737-300s. It is expected to grow its fleet during 2017 to support its network expansion, subject to final approval from Kenya’s regulator to its international flights plan.
The news of a potential proliferation of the low-cost model in Africa comes at a time that the nation celebrates the announcement from the US Department of Transportation’s (DOT) Federal Aviation Administration (FAA) that Kenya now complies with international safety standards and has been granted a Category 1 rating under the agency’s International Aviation Safety Assessment (IASA) programme. With the Category 1 rating, Kenyan air carriers are now able to secure the requisite FAA and DOT authority to establish service to the United States and carry the code of US carriers, but more importantly means they are recognised to operate to an international standard.
The return of non-stop scheduled flights between Kenya and USA are an obvious development opportunity for Kenya Airways and it is already understood to have started tentative discussions to turn this into a reality. Bob Godec, the US ambassador to Kenya, said in a tweet that the certification means it's only a "matter of time" before the first non-stop flights take off. "I can't stress enough how much we want to see Americans enjoying everything Kenya has to offer," he added.
After Kenya’s Cabinet Secretary for Transport James Macharia called for to “immediately apply for approval to codeshare with US airlines while concurrently pursuing approval for direct flights”, the national carrier, in which the state holds a 29.8 per cent shareholding, has confirmed its ambitions to start flights to the US. “Our first priority now is to pursue codeshare arrangements with our partners in the SkyTeam Alliance,” said the airline’s outgoing chief executive, Mbuvi Ngunze.
Kenya’s Cabinet Secretary for the National Treasury, Henry Rotich said the move will lead to increased tourists from the USA in the coming years, subject to the Kenya Airways formalising a codeshare deal with a US airline. Delta Air Lines in 2009 applied for rights to serve Nairobi from its Atlanta hub via Dakar, Senegal and is an obvious partner for Kenya Airways through their SkyTeam alliance links.
Tourism in the country had suffered following a series terrorist attacks over the first years of the decade, but latest data from the UN World Tourism Organization shows foreign visitors to Kenya grew by 16 per cent over the first nine months of 2016 and Kenya's tourism minister Najib Balala has been quoted as saying around 100,000 Americans visited Kenya last year. Kenya imported goods from the US valued at KSh43.89 billion last year, data from the Kenya National Bureau of Statistics shows. A growing export market increased 7.6 per cent to Sh43.47 billion.
Our own analysis of the AirVision Market Intelligence tool from Sabre Airline Solutions shows that an estimated 350,000 bi-directional O&D passengers flew between Kenya and USA in 2016, approximately 480 PPDEW (passengers per day each way). Kenya Airways currently has just a 3.1 per cent share through indirect flights of marketing partners in a country pair dominated by Emirates Airline (17.3 per cent), KLM (15.4 per cent) and Delta Air Lines (14.3 per cent).