KQ's Direct Flights to New York: It's big business

The Pride of Africa: leading the way
The Count-down has begun. We are two months away from Kenya-Airways’ direct flights to New York from Nairobi.  Save for any unforeseen occurrence, the deal is done.

For Kenya, the start of Direct flights to the USA is more than just our colours on American airspace.  It is big business and means more jobs at home. A number of stakeholders are salivating over the prospects of getting a foothold on the US market.

 Cut flowers exporters have all along been salivating over the US market, the largest cut-flower market in the world. However, the cost of delivering them has been a draw-back.

Cut Flowers: Gunning for  10% stake in The US
Now with Direct flights, the market has drawn closer to home. It is only 15 hours away! The US Cut-flower market is estimated at US$ 2.5 billion and is dominated by Colombia which controls a large chunk of it.
Kenyan flowers have a tiny 0.4 percent of this humungous market and officials in Nairobi are baying for a 10 percent stake.  That is a whopping US$250 million!  No wonder, Kenyan flower exporters are salivating for the direct pie of the cake.

 The officials say that direct flights will make this possible since the cost of delivering cut flowers to the US market is a great drawback.

A Textile  mill: Leading exports to the US
Apart from flowers, other producers who would benefit from the Direct flights include Macadamia nut growers whose market share has been on the up and up.  Last year, Macadamia nuts exports hit the US$5 million mark. The direct flights will ease delivery and cut delivery time to just 15 hours.

 Lack of direct flights has been blamed for a lot of ills bedeviling Kenya’s ambition to enter the US market in a big way. Apparel exporters blame the long distances for failure to deliver on time. They say that it takes 135 days to fulfill an order. 75 of these are taken by delivery of yarn from Asian countries to make apparel.

Also eyeing the US market is Rivatex Mills which is modernizing its plant in order to set A foot on the US Market. Apparels exports form lion’s share of all exports to the US under AGOA, the preferential trade arrangement design to support Africa exports to the US.

Macadamia Nuts: Presence being felt
Last year, the sector earned $370 million from Exports to the US. That was a huge chunk of the US$570 million worth exported from Kenya last year.  Kenya hopes to leap-frog exports to the US market significantly with the direct flights.

Avocado, the new kid on the block is also said to be eyeing the US market as are coffee roasters. Then, of course, the Kenyan travelers to and from the US. No longer will they fly to Amsterdam or Addis-Ababa before they land home. For these, it will be a leap across the Atlantic to Nairobi.


Given all these hanging fruits, it is no wonder the government has doggedly invested in the improvement of Jomo Kenyatta International airport over the last decade. The African Development Bank estimates that construction of the US$350 million second- modern runway at the hub will generate an additional US$20 million a year to  Kenya’s GDP. Now we see how!

Comments

Post a Comment

Popular posts from this blog

Kenya's SGR Loan: The Former Controller and Auditor General Lied

By The Conversation In December 2018, a leaked letter from the Kenyan auditor-general’s office sparked a rumor that Kenya had staked its bustling Mombasa Port as collateral for the Chinese-financed Standard Gauge Railway. Our new research shows why the collateral rumour is wrong. The former auditor-general, Edward Ouko, was completing the 2017/18 audit of the national ports authority. He warned that the port authority’s assets – of which Mombasa Port is the most valuable – risked being taken over by China Eximbank if Kenya defaulted on the US$3.6 billion railway loans. The profitable Mombasa Port is East Africa’s main international trade gateway. Launched in 2017, the railway was intended to seamlessly link the port to Kenya’s capital, Nairobi, and landlocked countries beyond. The Kenyan fears mirrored another tale widely circulated earlier in 2018. In that story, China was said to have “seized” Hambantota Port in Sri Lanka when the island nation had trouble repaying Chinese lo
Read more

Construction of Tanzania’s” bridge over the sea” begins

Image
A prototype of the entire project on Kigamboni side CONSTRUCTION OF THE long awaited Kigamboni Bridge in Dar-es-salaam, Tanzania, has begun. Tanzania’s President, Jakaya Kikwete, laid the foundation stone two weeks ago, signaling the beginning of construction works.  The US$138 Million toll-road will be completed in 36 months. The works include the construction of a 680M long-four lane - bridge across the Indian Ocean, 2.5 Km of six lanes highway, pedestrian paths and a toll plaza The bridge will be linked to Dar city by a 1.0 KM six lane highway while to Kigamboni; it shall be linked by a 1.5 KM six lane road. In total the works include the bridge and 2.5 KM of roads, all totaling 3.2 KM.  According to a note from Tanzania’s Ministry of Works, the bridge is a joint venture between the Government of Tanzania and NSSF.  NSSF will own 60 per cent stake while GOT owns the rest.  The same note says that on completion its management will be concessioned for 25 years.  T
Read more

President Jimmi Richard Wanjigi!

Image
 President JW  A Raila win in Kenya’s presidential elections will be a win for Jimmi Richard Wanjigi, this Publication can confidently report. Raila will only be a vassal President, with real power lying with JW as they refer to him.  They will have no power for he has bought them and supported their campaigns. Jimmi has been plotting to bring down President Uhuru Kenyatta’s government since 2013 because the government has stood on his way to fleecing Kenyans. Wanjigi brought together the then competing opposition groups URP and TNA led by William Ruto and Uhuru Kenyatta, respectively in 2012, ahead of that year’s election.  His idea was to put in power a government that will look the other way as he plunders Kenya. Among his pet project that he hoped the new government will allow him to implement, was the US$ 9 billion Standard Gauge Railway and the US$ 600 million second runway and passenger terminal at the Jomo Kenyatta International Airport in Nairobi. The two projects,
Read more