Kenya Airways has reduced flights on its Nairobi-New York route after the service failed to attract enough passengers in its early months, raising fresh questions about the carrier’s demand forecasts and the scale of its investment in the long-haul link.
The article was published on 2018-11-20T09:03:30.000Z. The national carrier had promoted the route as a major revenue driver, saying it could lift earnings by 10 per cent starting in 2019 and help return the airline to profitability. Instead, the schedule has been cut by 30 per cent this month to 20 flights, with the airline blaming low winter-season demand.
In a statement, KQ said it had cancelled services that were not commercially viable and argued that such adjustments are normal in the airline industry. It also maintained that the New York decision was not made after operations began, but followed market research carried out before the route was launched.
Analysts have criticised the move, saying the airline should have forecast demand more accurately to avoid what they described as a costly mistake. Kenya Airways, however, said the route was designed to capture travellers who previously had to connect through Europe and that the nonstop option was already receiving a positive response.
The carrier said it would focus mainly on passengers rather than cargo on the route. It added that cargo volumes would not justify a dedicated freighter, so freight would instead be carried in the bellies of its 787-8 Dreamliners. Cargo uplift was scheduled to begin on December 1.
“KQ’s direct flight to New York opens promising opportunities for Kenyan fresh produce farmers including horticulture industry but there is no plan to start cargo flights on this route. Plans are however in place to start uplifting cargo with effect from December 1,” the airline said.
The wider economic case for the route rests on trade and tourism links between Kenya and the United States. According to the Kenya Economic Survey 2018, exporters under the African Growth and Opportunity Act shipped goods worth Sh32.8 billion to the US, out of total exports to that market of Sh47 billion.
Tourism figures also featured in the airline’s argument. In 2017, the number of tourists from the US stood at 148,000, part of the 1.24 million visitors who came to Kenya that year. The US remains one of Kenya’s traditional source markets, with travellers often forced to endure long journeys and stopovers before the direct service became available.
Kenya Airways said the route should also support investment flows. In June 2018, more than ten American firms were in Kenya seeking deals with local companies, and reports said agreements worth more than Sh10 billion were reached. Further commitments came during President Uhuru Kenyatta’s visit to the US in August 2018, when American companies agreed to invest $238 million, or Sh24 billion, in projects targeting energy and food security.
The airline said the route would help move people and goods between the two countries, a development that could benefit Kenyan industries with closer ties to the US even if the immediate gains appear to favour the country more than the airline itself.
