Kenya Airways Chief Executive Officer Mbuvi Ngunze addresses the media in the past. Kenya Airways has long enjoyed what the aviation world calls grandfather rights to London Heathrow. PHOTO | SALATON NJAU | NATION MEDIA GROUP
In what it touts as a move to improve efficiency and utilize its assets better, Kenya Airways last week announced changes in its Nairobi-London Heathrow flight schedules to take effect this week.
KQ 100 will now be departing Nairobi at 9.10 am and arriving London at 4.15 pm. The return flight will be later the same evening to arrive Nairobi in the morning, thereby utilizing one aircraft instead of two.
To the uninitiated, the move looks sensible on the surface but it has left aviation insiders and travellers aghast.
Alarm bells, now familiar since the airline announced a Sh28 billion loss in March, 2015, are ringing everywhere.
This should be easy to understand. Just as an example, let’s say you are a business traveller going to London.
You have an option of two carriers: one is departing JKIA around 11 pm to land at Heathrow at about 6am. This will save you a night’s hotel expense and allow you a full day for work.
The other departs JKIA at 9.10 am and arrives Heathrow at 4.15 pm. So you will have to sleep twice in a 24 hour day and pay extra for it.
Which would you prefer? Kenya Airways mysteriously believes more people would prefer the latter, hence the glowing spin it has put on this confounding move.
But the market has already started voting with its feet. Flight cancellations from desperately needed customers have started flooding in.
As of this writing, more than 3,000 summer bookings on KQ London Heathrow flights are reported cancelled.
Yet there is a lot more to this than meets the eye. The morning slot at London Heathrow is one of the most coveted in world aviation.
Last month, the Sunday Times of London reported that Oman Air had set a new record by buying “a highly prized early morning arrival” slot to Heathrow for $75 million (Sh7.5 billion) from Air France-KLM.
“The price beats the $60m (Sh6 billion) paid by American Airlines for a slot a year ago, bought from the Scandinavian carrier SAS,” the paper said.
Kenya Airways’ early morning arrival slot in London Heathrow is now being used by Oman Air arriving from Muscat.
Its old departure slot is now being used by Emirates who bought it from KLM-Air France for an undisclosed amount. That will make it Emirates’ sixth daily departure from Heathrow.
The question is: how much of the $75 million paid by Oman Air to KLM-Air France went to Kenya Airways, in that this has been its slot since it was born?
Some industry insiders have put the value of that slot to as much as $100 million (Sh10 billion).
Meanwhile, Arabianbusiness.com reported that “struggling Kenya Airways is reportedly planning to enter a sale and lease back agreement with equity partner KLM over its sole London Heathrow slot."
"The move is aimed at generating much needed cash for the Kenyan national carrier but risks veto from a government, which is already weary of management and its relationship with the Dutch airline."
This would be like a taxi cab operator selling his car and hiring it from time to time for a price and availability determined by the new owner and still considering himself in business.
Efforts to get KQ to disclose to the public how much it got from the Heathrow slots sale have not been successful. This is one of the reasons alarm bells are ringing.
Fears abound that at best the airline, given its dire financial straits, could have been arm twisted by its long-term partner, KLM, to accept a pittance for the slots. Only a full disclosure can allay these fears.
Kenya Airways has long enjoyed what the aviation world calls grandfather rights to London Heathrow.
Its predecessor, East African Airways, flew Queen Elizabeth II Nairobi-Entebbe in 1952 from where she boarded a BOAC flight to London to start her reign.
That set the foundation and on a weekly basis since 1959 EAA flew to Heathrow. Kenya Airways inherited this slot when it was founded in 1977 upon EAA’s collapse.
Yet the question of how much the airline sold its prized Heathrow morning slot is only the beginning of a plethora of uncomfortable questions that come to mind whenever even the smallest of facts surface about the relationship between Kenya Airways and KLM.
The agreement between them, sealed in the mid-90s, was sold as the panacea for the then ailing national carrier and for a while, it seemed to be actually so.
The former matatu airline became the pride of Africa, acquiring an increasingly young fleet and maintaining high standards of time keeping and in-flight service.
Last year’s Senate report that documented KQ’s woes had this to say: “When the Government of Kenya privatised Kenya Airways in 1996, it was dubbed as the most successful privatisation process in the country’s history.
The coming on board of a strategic partner, KLM Royal Dutch Airline in 1995, and the subsequent listing at the Nairobi Securities Exchange was viewed as the beginning of a new era of vibrancy, transparency, profit making and national pride in the carrier.
Subsequently, the airline dominated the skies of Africa and beyond. Unfortunately, just this November, the airline announced a half year loss of close to Sh12 billion and this follows a Sh28 billion loss for the period ending 31st March, 2015.”
The report categorically recommended that a new management team for KQ (old hands are still at the controls) “reviews the Joint Venture with KLM, especially on the provisions of code sharing, revenue management and sales tracking to ensure equity in revenue sharing.”
This has not been done. To the contrary, KLM is still reaping big from its ailing partner. The opaque nature of the Heathrow slot sale does not help matters.
Just as in unions between individuals, the abusive nature of the marriage between KQ and KLM was apparent even during the honeymoon period only that it was insiders who knew it.
Saturday Nation has in its possession documents dating back years that show Kenyans were hurting, even as the image of a world-class airline was marketed to the public.
Shareholders at large, and the public in general, now know what insiders put up with.
The Kenya Airline Pilots Association (Kalpa), is a well-known in the trade union sector.
If you talk to its older members, they will tell you the two greatest battles they have won in the last 10 years is stopping KQ’s management from hiring foreign pilots and warding off attempts to break up their union.
THE HARD QUESTION
This took place when the loftily-named Project Mawingu - Swahili for clouds - that flew KQ into the financial crater it currently sits in, was at its height.
If the project worked, KQ would have needed about 1,600 pilots by the year 2022. It then had only 400. Management put a lot of pressure on Kalpa to accept pilots from KLM who at that time had a surplus of them.
Kalpa instead asked management to train Kenyans in readiness for the increasing size of the fleet. Management flatly refused.
At one point, management suspected that Kalpa was thinking of a strike. It obtained court orders to pre-empt the suspected strike - a curious legal decision, but it happened.
The result of all this was terribly frayed industrial relations. Passengers were the major casualties of this dog-fight.
The pilots withdrew their professional goodwill, meaning they worked strictly to their barest obligations; if somebody called in sick, there was no replacement. Flight delays and cancellations became the order of the day.
The pilots eventually beat back their management’s efforts to introduce KLM air crews in their ranks but the effects of this fight are being felt even today.
The benefits that KQ and KLM were supposed to bring to their new life together were clear – at least as Kenyans believe they know the story.
Both Kalpa and Aviation and Allied Workers Union, which represents cabin crews, made detailed presentations to the Anyang’ Nyong’o-led Senate Committee on KQ’s woes.
The part of the report that deals with KLM-KQ partnership, from Kalpa’s presentation reads: “KQ and KLM had an MoU, in terms of sharing profits though Kalpa was not privy to its terms. They presented that under normal circumstances, two airlines would agree on (a) hub concept where KQ would fly passengers destined to European routes from Africa to Amsterdam and KLM flies them to their final destinations while KLM would fly passengers plying the African routes from various destinations to Nairobi and KQ would fly them to their final destination.
The Committee was told KLM flew to most African routes, denying KQ this opportunity, while KQ flew to minimal European routes (Amsterdam, Paris and London) from Nairobi. The prevailing circumstances deny KQ the opportunity to share profits with KLM.”
This lopsided equation provoked the question: what is in this for KQ? Unless there are benefits that the company for whatever reason is unwilling to share with its shareholders, the following questions come to mind:
If you come to my backyard to compete for my customers, what do I need you as a partner for? And if you are not here to induce my death so that you can inherit all I have, what are you here for?
Unfortunately, it gets worse. If you read some documents, the inescapable conclusion you come to is that KLM understands this MoU in two ways that can be framed as follows:
On the financial side, my profits are mine, your profits are ours and your losses are yours. On the technical side, I will service your aircraft, at your cost, in Amsterdam and wherever else I land with Air France, including Africa, but you will not touch mine – even in Nairobi.
In some old correspondence at the height of Project Mawingu, you read of a pilot complaining that “KLM has a very well equipped training centre with flight simulators but have you wondered why we don’t train there? In fact, we go to the extent of out sourcing such services from our competitors such as ET, Egypt Air, SAA, etc., since we get a better deal from them!”
And another one laments: “KLM maintains our aircraft in Amsterdam, London Heathrow and Mumbai. (But) no reciprocal arrangement is done in Nairobi to turn around KLM aircraft.”
In one of other such instances, Kenya Airways paid Sh18 million in compensation to passengers who missed their connection flights in Amsterdam after their flight from Nairobi arrived there one hour behind schedule.
The delay was caused by holding the KQ plane in Amsterdam that would make this return trip from Nairobi. It was waiting for KLM’s passengers.
On learning of the pay-out, the bewildered captain wrote to his boss: “I always believed that the money came from the combined fortunes of both KLM and KQ alliance. It now seems that we share the profits, but KQ shoulders the losses.
Cost-cutting is meant to be a priority in our company. But the policy sounds hollow when crew witness the company throwing good money away, just to please an unappreciative parasitic partner. KLM is the parasite and KQ is the host.”
The massive evidence of incompetence and mismanagement that the Senate committee unearthed during its five-month probe resulted in a scathing conclusion:
“The committee was not persuaded that the Kenya Airways management understood the environment and market they were operating in so as to maintain a competitive edge, make strategic decisions in key areas that required constant vigilance in studying global and regional markets and destinations, the vagaries or ups and downs in the oil industry, planning of routes and networks, leverage partnerships with KLM and the Sky team, sale of tickets, capitalizing the potential and dynamic of its own local and regional base where it had inherent hegemony in Kenya and Africa.”
To its credit, the committee declined to make a much sought-after recommendation that the public picks KQ’s turn-around tab.
It also thoughtfully declined to recommend the company’s dissolution citing its importance to the Kenyan economy.
Instead, it soberly put the ball in the court of the shareholders to whom it recommended make a capital injection but only after heads rolled at KQ headquarters.
It is surprising, given the evidence that is readily available, that no steps have been taken to end the relationship with KLM.
Since it came on board, the Dutch carrier has maintained powerful Kenyan gatekeepers at KQ’s headquarters whose zeal at enforcing its interests boggles the mind.
But the time has surely come for the shareholders to drop everything else and call their marriage partner and say: I want a divorce – now.
African doctors meet in Nairobi over diabetes crisis
African doctors meet in Nairobi over diabetes crisis Last year, there were 478,000 cases of diabetes reported in the country, with 8,722 adults aged between 20 and 79 dying of the non-communicable disease (NCD). IDF affirms that these figures will be more than double by 2040. One hundred doctors from ten countries in Africa are set to converge in Nairobi over innovative treatment and control of diabetes. The specialists are seeking to share expertise in tackling the mounting problem now responsible for 40 per cent of the total deaths from non-communicable diseases. “We aim to raise standard care for diabetes patients through high level education delivered by world class experts,” said Novo Nordisk general manager, middle Africa operations Venkat Kalyan. The 10 African countries being pooled include; Kenya, Nigeria, Senegal, Gabon, Cote d’Ivoire, Cameroon, Sudan, Ethiopia, Tanzania, Uganda, Mauritius, Botswana, Zimbabwe, Namibia and Mauritius. Mr Kalyan said that the global healthcare company will be hosting the forthcoming sub-Saharan Africa insulin summit set for October 8. Of the nearly 400,000 Kenyans who die of NCDs annually, diabetes account for 40 per cent of the deaths - WHO 2014. Early screening Last year, there were 478,000 cases of diabetes reported in the country, with 8,722 adults aged between 20 and 79 dying of the non-communicable disease (NCD). IDF affirms that these figures will be more than double by 2040. READ: Diabetes in infants linked to rapid weight gain Lack of early screening has been cited by the Health Ministry as a fuelling factor of diabetes deaths. Data from the Ministry shows that between 650,000 and 1.5 million Kenyans have diabetes, a quarter of whom do not know as they shun screening. Diabetes can be hereditary but it can also occur from overconsumption of sugar or sugary foods and drinks, alcohol, inactive lifestyle. The disease causes life-threatening complications including; blindness, kidney failure, loss of limbs, comas, among others.
Recording artist Chris Brown poses at the 2016 iHeartRadio Music Awards in Inglewood, California, April 3, 2016. REUTERS/Danny Moloshok/File Photo
American R&B and hip hop star has personally made it official that he will indeed be rocking his fans in Mombasa next month.
In a video posted online early Wednesday, the Loyal hit singer tells his avid fans to better get ready for his show.
The concert, which will also feature Nigerian music star Wizkid, is slated to go down on October 8 at the Nyali Golf club.
Chris Brown's concert comes just a few days after fellow American singer Trey Songz' hyped-up visit to Kenya.
He was in Nairobi for the recording of the pan-African non-competitive TV show Coke Studio Africa Season Four.
It's set to premiere next month on October 8th 2016 in Mombasa
Central Bank governor Patrick Njoroge at the quarterly review briefi ng in Nairobi on Wednesday /ENOS TECHE
World’s leading banks, consultancies and think-tanks have revised up the country’s growth forecast this year for the first time in three months, citing infrastructure projects which are coming on board.
A consensus growth outlook from the 12 global firms shows the country’s economy is likely to expand by six per cent this year, a slight 0.1 percentage point upgrade over the last three months. This mirrors International Monetary Fund’s projection in April, while the World Bank stuck to 5.9 per cent forecast in June.
The firms are JPMorgan of the US ( 6.1 per cent), HSBC of UK ( 5.7 per cent), Standard Chartered Bank ( 5.8 per cent), Barclays Capital ( 5.6 per cent) and New York-based brokerage firm Citigroup Global Markets ( 6.0 per cent).
Others are Fitch Ratings-owned BMI Research ( 6.5 per cent), consultancy firm Capital Economics of UK ( 6.5 per cent), Washington- headquartered Frontier Strategy ( 5.9 per cent), Economist Intelligence Unit ( 5.8 per cent) and credit insurance firm Euler Hermes of France ( 6.0 per cent).
Oxford Economics, the Oxford University’s economic forecasting arm, sees Kenya growing by 5.6 per cent while Euromonitor International, a London-headquartered research firm, projects a six per cent growth.
“Growth is being sustained by several infrastructure projects, including a new container terminal at the Mombasa port that is expected to increase its cargo capacity by 50 per cent, which is also crucial for Kenya’s plan to become an oil producer and exporter in 2017,” researchers at FocusEconomics, a Barcelona-based economic analysis firm, said in the report last week. “Increased tea output in the first half, coupled with the ongoing recovery in the tourism sector is supporting exports and foreign reserves.”
Capping of interest rates at four percentage points above the 10 per cent Central Bank Rate has, however, raised concerns of “riskier” firms and households being locked out of credit market, slowing growth in the medium term.
“The law will nevertheless support the activity of consumers and firms that remain eligible for loans in the formal market since it will make private sector credit cheaper for them,” FocusEconomics analyst Teresa Kersting told the Star via email. “On balance, however, the adverse impact of the drying-up of credit to riskier market segments will likely prevail.”
Credit to the private sector rose by a dismal 8.6 per cent in June year-on-year, much slower than the CBK’s target of 15.3 per cent, and slowed further to 7.07 per cent in July.
“We need to go and investigate and see who actually has done what,” Central Bank governor Patrick Njoroge said last Wednesday. “We began to see this trend since June when it became much clearer although there was some sort of deviation earlier in the year.”
Source: The Star
Jackline Mwende during an interview at her parents' home in Kathama Village, Machakos County on August 1,2016.PHOTO | EVANS HABIL
The woman whose husband is charged with chopping off her hands will fly out to South Korea on Monday evening to be fitted with prosthetics.
Ms Jackline Mwende will go abroad because the prosthetics needed are not available locally.
Her doctor Mr Michael Maru from PCEA Kikuyu hospital said they had already cleaned her stump and prepared her in readiness to be fitted with the electric limbs.
“I want to clarify that it will not be a surgery but rather an operation to fit the limbs on her,” Dr Maru told a press briefing on Monday.
He said Ms Mwende is expected to regain 80 per cent of the use of her hands once fitted with the limbs.
Her new prosthetics are expected coordinate with her upper hand muscles to enable her feed herself, carry some objects, turn on electric switches and perform other light chores.
The limbs are designed to mimic the human anatomy as they rely on naturally generated muscle energy for movement.
Ms Mwende’s hospital and prosthetics bills will be paid by LG Electronics, a South Korean company.
Zeenat Jamal, 43, has lived in the UK since 2001 and is flying to Kenya on Sunday
Brooke Gaughan (left) and his girlfriend Zeenat Jamal are being separated as Zeenat has had to return to Kenya after living in the UK for 15 years
A woman who has been living in the UK for 15 years is flying to Kenya on Sunday despite having no family and nowhere to stay after she claims she was facing deportation.
Zeenat Jamal, 43, has lived in the UK since 2001 and left Kenya with her four sisters, who she says now all have British passports.
Zeenat, who holds a Kenyan passport, is now due to fly to Nairobi after spending six years with her partner, Brooke Gaughan, who up until a month ago lived happily together in Dinas Powys.
Brooke and Zeenat met six years ago in London and decided to move to Cardiff in 2012, before settling in Dinas Powys two years ago.
With her sisters still living in London and building a life for herself in South Wales, Zeenat had settled happily in Wales with her partner.
Unable to work while her applications were being processed, Zeenat said she volunteered in Cardiff’s Cancer Research UK shops, first near Cardiff Central train station until it closed and then in Canton.
Having to present herself to the authorities every two weeks, Zeenat said that when she made her most recent application to become a British citizen she was told she was being detained at Yarl’s Wood Immigration Removal Centre and would have to be deported.READ MORE
WyWycliffe Omondi, one of the developers of the Magic Bus Ticketing app. PHOcliffe Omondi, one of the developers of the Magic Bus Ticketing app. PHOTO | DIANA NGILA
Developers of Magic Bus Ticketing, a mobile phone application that enables booking of public transport, have secured a Sh101 million ($1 million) grant from a Bill Clinton-backed fund after emerging top out of six finalists. The Hult Prize finalists were crowned overall winners of the startup funding for their idea of digitising booking, pre-payment and on-board payment of fare for commuters in Kenya. The idea was borne out of a challenge for the Hult Prize, funded by Clinton, whose contest this year was the creation of a better model to connect people to goods and services in crowded urban spaces. The contest received over 25,000 entries which were shortlisted to six finalists. The developers comprise a group of students from Earlham College Wycliffe Omondi, Leslie Ossete, Iman Cooper and Sonia Kabra. PILOT WITH MATATUS The team opted to pilot the idea in Kenya with matatus from Ongata Rongai and Buru Buru available for booking and prepayment on the app. “In Kenya there is good mobile connectivity and matatus are already in saccos which makes it easier to deal with than going to individual matatus. It was a ready market and we had connections with the saccos,” said Mr Omondi in an interview with the Business Daily.
Magic Bus co-founder Wycliffe Onyango Omondi (right) with a volunteer during the interview. PHOTO | DIANA NGILA
The offline app works via a short code (USSD), which prompts the user to follow a menu of instructions. Magic Bus co-founder Wycliffe Onyango Omondi (right) with a volunteer during the interview. PHOTO | DIANA NGILA Magic Bus co-founder Wycliffe Onyango Omondi (right) with a volunteer during the interview. PHOTO | DIANA NGILA The short code instructs the user to select their route, pick-up and drop-off points before offering the selection of matatus that are available and the estimated pick-up time. Once a user selects their vehicle of preference, they proceed to pay and move to the bus stop within the expected arrival time of the vehicle. In addition to the pre-booking and prepayment, commuters can track the position of the vehicle in real time. Those already on board can pay for their fare via the same service. The team has been working to get long distance travel companies on board to cut the need for commuters to walk to bus offices to make bookings and payments. LONG DISTANCE “We’re looking to start piloting for long distance in September. The piloting is to go until January for robust market research before we formally launch and also expand into other markets,” said Mr Omondi. The group had received funding of $10,000 (Sh1 million) from French based Transdev after they were shortlisted as one of the three top picks for transport apps along with Maramoja Taxi and My Ride. According to Mr Omondi, the team will invest the funds in further research and growth of the business. The team is also looking at the alternative of managing its own fleet in addition to having the service for use by other organised groups. “We are looking at a franchise model where there are standards that must be followed to use our service,” he said. Matatu and bus crew are allocated tablets that are used to indicate the number of seats available and prevailing charges.