|KQ: Turning around, plans expansion|
Kenya Airways Plc has plugged 30 per cent of its financial hole, reporting a decline in its loss in the first half of the current financial year. Its losses stood at US$39.7 Million from $56.7 million a year ago.
Further, the third largest airline in Africa plans and aggressive growth of its fleet and expand to 20 new routes in the next five years. Consequently, it plans to hire as many as 100 pilots a year over the next five years, Chief Executive Officer Sebastian Mikosz said.
The carrier is facing “significant operational challenges” and needs as many as 70 additional first officers and 50 captains to operate its current fleet of 40 aircraft, along with new aircraft it plans to acquire, Mikosz said.
The airline, which begins direct flights to New York from Nairobi ion October 28th, is preparing to take back five aircraft sub-leased to Oman Air Transport and Turkish Airlines from October and needs more people to fly them, he said.
KQ, as the airline is known, on Wednesday reported a 3.1 per cent growth in revenue to 51.2 billion shillings. The stock climbed 0.5 per cent in Nairobi, paring its loss so far this year to 38 per cent.
Analysts think the airline is up to something: "The biggest concern they have is new revenue,” Mercyline Gatebi, head of research at Kingdom Securities Ltd. in Nairobi. “If the foreign pilots are coming at cheaper negotiated rates, it means the cost-benefit analysis is well thought out and it may be of benefit for Kenya Airways’ top line.”
The carrier could source some experienced foreign pilots in order to save on training costs, according to Gerald Muriuki, an analyst at Genghis Capital Ltd. There are fears though that the Kenya Pilots Union may oppose the hiring of foreign pilots, he said.
It targets the troubled South African Airways, for some experienced pilots.
“There is no other way because we cannot have a situation where lack of crews is blocking the growth of the airline,” he said. “There are always emotions when you change things, but that’s life.”
The Pilots’ Union’s opposition if any, say, analysts, may receive hostility from the government which is the majority shareholder in the airline. In the recent past, the government of Kenya has been quite uncompromising with labour unions.
And since the airline is facing stiff Competition in the African airspace from Ethiopian Airlines which is expanding aggressively, it may not entertain labour movement’s wiles.