Kenya Airways expansion could prove SAA’s further loss

CAPE TOWN — Just as the South Africa government finally decides to plug the billion-rand annual fiscal leak that is SAA with a three-year equity partnership plan, we’re reminded how far we’ve fallen behind the rest of Africa with Kenya Airways providing the latest example. In fact, the misfortunes of SAA during the nine-year tenure of Zuma’s close friend and her airline pilots favourite person, Dudu Myeni, could be exacerbated by Kenya Airways expansion. You see they want more pilots, preferably experienced ones who can be put in harness immediately in their country’s fleet, and its routes are substantially expanded. Where better to look than the historically state-supported SAA? Battling to get off the ground financially after the Zuma years during which it lost unprecedented billions with shaky deals and dysfunctional management, SAA’s brightest and best might decide that a short skip and a jump to Nairobi is just the thing. After all, Myeni cited their allegedly high salary bill as the main reason for SAA’s financial woes. Who wants to risk continuing to fly a financially lame duck with decreased prospects of salary hikes, when all of Africa is now your oyster? – Chris Bateman

By Bella Genga

(Bloomberg) – Kenya Airways Plc may hire as many as 100 pilots annually as the company grows its fleet and adds as many as 20 new routes in the next five years, Chief Executive Officer Sebastian Mikosz said.

Sub-Saharan Africa’s third-largest carrier is facing “significant operational challenges” and needs as many as 70 additional first officers and 50 captains to operate its current fleet of 40 aircraft, along with new aircraft it plans to acquire, Mikosz said. The airline is preparing to take back five aircraft sub-leased to Oman Air Transport and Turkish Airlines from October and needs more people to fly them, he said.

Kenya Airways, airplanes, airlines

“We believe this is the only way to use the fleet we are getting back and eventually any new fleet, and we have to do it now,” Mikosz said in an interview in the capital, Nairobi. The company has trained 80 pilots so far, and is exploring the hiring of foreign pilots on contract terms to plug the gap created by retirements, departures and resignations.

KQ, as the airline is known, on Wednesday reported a loss of 4 billion shillings ($39.7 million) in the six months through June, narrowing from 5.67 billion shillings a year earlier, as revenue grew 3.1 percent to 51.2 billion shillings. The stock climbed 2.4 percent in Nairobi on Thursday, heading for its highest close in six weeks.

‘New revenue’

“The biggest concern they have is new revenue,” Mercyline Gatebi, head of research at Kingdom Securities Ltd. in Nairobi, said by phone. “If the foreign pilots are coming at cheaper negotiated rates, it means the cost-benefit analysis is well thought out and it may be of benefit for Kenya Airways’ top line.”

The carrier could source some experienced foreign pilots in order to save on training costs, according to Gerald Muriuki, an analyst at Genghis Capital Ltd. Still, the Kenya Pilots Union may oppose the hiring of foreign pilots, he said.

Foreign airlines that may be a source of pilots include struggling South African Airways, Mikosz said.

“There is no other way because we cannot have situations where lack of crews are blocking the growth of the airline,” he said. “There are always emotions when you change things, but that’s life.”

Kenya Airways plans to expand its cargo business, and is considering adding another Boeing Co. 737 to its fleet, Mikosz said.

“We are working on a model to have more freighters,” he said. The airline will “gladly look at another 737, maybe a wide-body freighter,” Mikosz said.

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