Kenya Airways has scaled back its Nairobi-New York service after the route failed to fill as quickly as expected, raising fresh questions about the airline’s planning and revenue projections.
At the time, the national carrier said the direct flight was meant to strengthen its finances and help push revenues up by 10 per cent starting in 2019, but it was already facing softer-than-expected demand.
The airline said it would reduce the number of flights on the route by 30 per cent to 20 for the month, blaming the cut on low winter-season demand. It also said the cancellations were limited to flights that were not commercially viable and insisted that such adjustments are common in the airline industry.
Analysts, however, argued that the carrier should have forecast demand more accurately before launching the service. Kenya Airways rejected that criticism, saying the decision to open the route had been made after market research and was not a rushed move.
In its defence, the airline said the direct connection gave passengers a better option than routing through Europe. It described the service as a non-stop product that removed missed connections, extra airport stops and other travel inconveniences.
Kenya Airways also made clear that the New York route would be passenger-led rather than cargo-led. The carrier said there was no plan to deploy a cargo freighter on the route and that freight would instead be carried in the bellies of its 787-8 Dreamliners, with cargo uplift scheduled to begin on December 1.
The airline said the route could still support Kenyan exporters and fresh produce farmers, especially the horticulture sector. It pointed to the Kenya Economic Survey 2018, which showed that industries exporting to the US under the African Growth and Opportunity Act shipped goods worth Sh32.8 billion, out of total exports to the US of Sh47 billion.
Tourism was another area expected to benefit. The article noted that 148,000 visitors came from the US in 2017, out of 1.24 million tourists who visited Kenya that year, making the US one of the country’s key source markets.
Beyond tourism and trade, the direct route was also expected to support investment flows. In June 2018, more than ten American firms were reported to have been in Kenya seeking deals with local companies, with agreements worth more than Sh10 billion said to have been reached. Additional commitments followed 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.
For Kenya Airways, the route was presented as a strategic link between Kenya and the US. But the article suggested that the wider economy may stand to gain more than the airline itself if the service eventually delivers on its promise.
