Kenya Airways CEO: “There Is Nothing Lucrative About Flying To New York”

Filed Under: Other Airlines

I don’t want to say “I told you so,” but…

Kenya Airways’ Nairobi to New York flight

Kenya Airways launched a daily nonstop flight between New York and Nairobi in late October 2018 (I reviewed the inaugural flight from New York to Nairobi). This was an airline that was on the verge of liquidation in 2017, but as is often the case, they let their ambitions get ahead of their business sense.

Inexplicably, the airline decided to immediately launch daily flights in the market. This is the first nonstop flight between New York and East Africa, so to operate that flight daily from  day one makes no sense. They’d be much better off starting with a few flights per week, and then gradually increasing service as demand picks up.

Not surprisingly, the airline quickly backtracked on that, and permanently reduced frequencies to New York.

Nonetheless this was a huge point of pride for the country, and the route was constantly referred to as a game changer (like over and over and over, as you’ll see in the below video).

How is Kenya Airways’ New York flight doing?

Kenya Airways just celebrated their six month anniversary of operating the route, so how’s the route doing? Well, I think this statement from Kenya Airways CEO Sebastian Mikosz tells you everything you need to know:

“I do not consider it to be a lucrative route. There is nothing lucrative about flying to New York.”

Nonetheless Kenya Airways seems committed to keeping the route, at least for now:

“The route is necessary but difficult. It is performing in the range that we expected. It is feeding our African network. It positions us differently.”

The airline just reported a roughly 75 million USD loss for 2018, which they attribute largely to volatile fuel prices, as the airline has seen fuel expenditure increase significantly. The airline hasn’t provided a more detailed summary of the financial performance of the JFK route, though I think it’s safe to assume it’s losing money.

Bottom line

It’s no surprise at all that Kenya Airways’ New York flight isn’t lucrative for them. I suspect the airline will keep the route around for prestige reasons and for general business ties, as a way of encouraging US tourism and investment in Kenya.

At least they’ll keep it around until Kenya Airways’ management decides they can no longer keep losing money.

This route has been such a huge point of pride for the airline from the beginning, and it’s sad to see it’s not making money. But like I said, the fact that they decided to start with daily flights suggests to me that they were never really realistic about it.

Comments
  1. It’s definitely a game changer. But can someone tell me how long the flight is from J-K-I-A to J-F-K? I can’t recall.

    In either case, I feel like you could have a wicked drinking game with that video!

  2. Granted, this is the first nonstop between East Africa and the US, including the success of ADD as a regional hub (2 hours away) in the conversation definitely ‘’makes sense.’’

  3. Philippine Airlines started MNL-JFK 4x a week on 2013, with more demand on this route. But took 6 years to finally operate service daily.

  4. @Steven Andes, PAL started daily once it had a nonstop to JFK before that it was a stop in YVR. Having flown this I will say at least in J it’s hit and miss, sometimes quite full and other times empty. They have a long way to go before becoming a 5* airline as service is hit and miss, customer service painful and MNL airport a dump.

  5. Given how Kenya Airways is a member of skyteam, I’d imagine a lot of people can connect through Delta’s wide network at JFK.
    I really hope it works out.

  6. This is a political decision not one that makes business sense. Wish that Kenya Airways would have connected through an European hub on transit to New York.

  7. This is a very simplistic way to look at airline economics. Whether an isolated individual route is profitable in the abstract is not as important as whether the route increases value for the entire network. That KE is now connected to the financial capital of the world is no small thing, as the network affects raise the value of every other spoke and the entire enterprise. Unfortunately the fact that this flight is not daily makes it much less useable for most business travelers, and limits the benefits.

  8. Whatever serious discussions you good folks intend to have, you cannot ignore the fact that……..
    …….
    THAT VIDEO IS STILL A GAME CHANGER

  9. North American routes from Africa is currently dominated by Ethiopian Airlines. KA has to do something to stop the bleeding. Even it means loss of revenue for a little while.
    They could succeed if managment put their act together..there is a room for both airlines and as we all know competition is good for flying public!

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