Bloomberg News

Kenya Airways Questions Buying Boeings Without U.S. Flights (2)

November 04, 2013

Kenya Airways Ltd. Chief Executive Officer Titus Naikuni said it’s pointless to acquire more aircraft from Boeing Co. (BA:US) unless the U.S. government allows his airline to begin direct flights to the country.

“I don’t see the point of buying aircraft from Boeing, then you don’t allow us to get into the U.S.,” Naikuni said at an event in the capital, Nairobi, to mark the arrival of a Boeing 777-300ER aircraft, the biggest in the company’s fleet.

Four years ago, Delta Air Lines Inc. postponed indefinitely a plan to start direct flights between Atlanta and Jomo Kenyatta International Airport in Nairobi, after the U.S. government refused permission over security concerns. Kenya borders Somalia, where the al-Qaeda-linked al-Shabaab Islamist group has been fighting the government since at least 2006. The militants attacked a Nairobi shopping mall in September, killing at least 67 civilians and security forces.

Kenya Airways plans to more than double the number of routes it flies and increase the size of its fleet to 107 aircraft as part of a decade-long expansion plan, it said last year. The carrier currently has at least 26 Boeing passenger aircraft, two Boeing freighters and 17 Embraer SA (EMBR3) jets, according to the company’s website, and it has ordered nine Boeing 787-800 Dreamliner airplanes. Delivery of the first one is expected in March, according to Naikuni.

Golden Moment

The Boeing 777-300ER aircraft will be used for non-stop flights to Guangzhou, China, three times a week in line with the country’s strategy to deepen commercial ties with the Far East, Kenyan President Uhuru Kenyatta said at today’s ceremony.

“This presents a golden chance to deepen our bilateral partnership with China, which is one of our leading cultural, diplomatic and economic development partners,” Kenyatta said.

Kenya’s government owns 30 percent of the Kenya Airways and Air France-KLM is its largest shareholder with a 27 percent stake, according to data compiled by Bloomberg.

Kenya is expediting construction of a fourth terminal at Jomo Kenyatta airport to be ready by March after a fire gutted the international arrivals hall in August, forcing authorities to set up a temporary area to handle immigration and baggage pick-up in tents in a parking lot outside the building.

Kenya’s more than $1 billion a year tourism industry is the country’s largest source of foreign exchange after tea exports. British Airways Plc, Air France-KLM (AF) and Emirates Airline are among international airlines that fly directly to Nairobi.

Shares in Kenya Airways fell 0.5 percent to 10.45 shillings by 2:33 p.m. in Nairobi, taking losses this year to 8.3 percent, according to data compiled by Bloomberg.

To contact the reporter on this story: Eric Ombok in Nairobi at eombok@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net


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