Kenya Airways is hoping to end a long-running revenue slump by launching direct flights to the United States late this year, following an uptick in tourism numbers despite election unrest.
The airline’s competitor in neighboring Ethiopia already offers direct flights to the USA, while Kenya has been unable to do so because until recently it lacked security clearance from American authorities. Egypt, South Africa, Ghana, and Senegal are among other African countries already served by direct flights from the USA.
Kenya Airways has suffered losses for five consecutive years, including $100 million lost in the fiscal year 2016-2017. The Kenyan government last year moved to bail out the airline in a deal that diluted the share of part-owner Air France-KLM from 26.7% to 7.8%.
The November 2017 deal increased the government’s ownership stake from 29.8% to 48.9% afterwards, while a group of 11 local banks took a stake of 38.1%.
In a press statement on Thursday, Kenya Airways announced that its direct flights from Nairobi to New York City will begin this October, while ticket sales have begun already. The company claims that the new route will increase 2019 revenues by roughly 10%.
Kenya Airways’ hopes for the new route are riding high in part because of improved tourism numbers in 2017, which defied expectations of poor performance due to election turmoil.
Tourism numbers grew roughly 8 per cent in the 10 months to October last year, including a 16% uptick in arrivals from the United States, the largest source market for Kenya.
More visitors are also coming from China, with a roughly 14% increase recorded last year.
Kenya Airways Group Managing Director and CEO Sebastian Mikosz called the new direct route “an exciting moment for us,” adding, “It fits within our strategy to attract corporate and high-end tourism traffic from the world to Kenya and Africa.”
The loss-making airline is approximately $2 billion in debt following the financial restructuring last year and it has been trimming its fleet of aircraft in an effort to save costs. The government considers the airline an important asset in spite of the challening business climate; last November, finance minister Henry Rotich called the airline a “strategic national asset.”