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Tuesday 29 September 2015

KENYA AIRWAYS GETS RELIEF AS GUINEA, SIERRA LEONE SKIES REOPEN


Kenya has lifted the ban on visitors from Ebola-struck West African nations Sierra Leone and Guinea, opening a flight path that closed 13 months ago for struggling national carrier Kenya Airways (KQ).

Kenya closed the door on visitors from the two countries and Liberia in August last year following an acute outbreak of an Ebola epidemic, cutting deep into revenues of the airline that operated 44 scheduled flights a week to 10 West African cities.

KQ, however, got some reprieve in May when Kenya opened the doors for visitors from Liberia but left both Sierra Leone and Guinea out.

The Ministry of Health has now lifted the ban on Sierra Leone and Guinean visitors, allowing the airline to resume full operations in West Africa, a move that comes as a big relief to the airline given its loss-making financial position.

“Following good progress in Ebola control, the Ministry of Health would like to lift the travel suspension that has been in place since August 2014 affecting travellers from or who have passed through the three countries,” said James Macharia, the Health secretary, in a letter dated September 21 to his Foreign Affairs counterpart, Amina Mohamed.

The letter is copied to Interior cabinet secretary and principal secretary, the director of immigration and KQ chief executive officer Mbuvi Ngunze.

Mr Macharia said the decision is informed by the fact that Guinea has not reported any confirmed cases of Ebola for more than two weeks while Sierra Leone, which lifted the ban on public gatherings on August 7, is now reporting less than three cases per week — down from a high of 500 per week in December.

Mr Macharia added that Liberia, which was cleared by the Kenyan authorities in May, has also not reported any case of the deadly haemorrhagic disease for more than two months.

The minister, however, promised that Kenya would continue to screen all travellers arriving from the affected countries.

Before the Ebola outbreak, Kenya Airways operated 44 scheduled flights a week to 10 West African cities, including Conakry in Guinea, where the epidemic started in March 2014, Freetown in Sierra Leone and Monrovia in Liberia.

The airline stopped flying to Guinea, Sierra Leone and Liberia after a Liberian Ebola victim travelled to Lagos (not on a KQ flight), causing a small outbreak of the epidemic there.Kenya Airways resumed flights between the Ghanaian capital and Monrovia on March 29 (after nine months of closure), offering five flights a week between the two cities but could not bring any of the Liberian traffic to its Nairobi hub.

Last October, Mr Ngunze, indicated that a sustained ban on the West Africa routes, lasting until the end of the carrier’s financial year in March, would cost the company at least four per cent of its annual revenue or about Sh4.2 billion.

West Africa’s contribution to Kenya Airways’ total Africa revenues is significant, standing at 10 or more than a quarter of the total coming from the 36 destinations and highlighting the financial impact of the travel restrictions.

Mr Mbuvi on Thursday welcomed the government’s decision to clear Sierra Leone and Guinea.

“The airline in consultation with the Ministry of Health has constantly assessed the situation and is pleased with the latest development,” he said in a statement.

KQ’s flight into the Ebola headwinds came as it grappled with a steep drop in tourist arrivals in the wake of insecurity concerns, rising operational expenses, fuel and financing costs.

The airline this week revealed that the UK government’s ban on khat (miraa) trade also cost it half a billion shillings, pushing it deeper into the loss-making territory.

These factors, according to KQ’s management, collectively contributed to the company posting of a record-setting Sh25.7 billion loss for the year to March, the highest in corporate Kenya’s history.

The airline’s debt-financed fleet modernisation programme wiped out shareholder wealth as it its total liabilities stood at Sh187.9 billion, more than its assets valued at Sh182 billion.

“These investments (fleet renewal) coincided with a difficult business environment driven by incidences of terrorism in the region, adverse external factors like Ebola and the effects of travel advisories,” Mr Ngunze tells shareholders in the airlines’ 2014/2015 annual report.

“These factors cumulatively had a negative effect on the Kenyan tourism and aviation sector. As a result, both the operational and financial performance of the airline for the period under review was adversely impacted.”

Business Daily, Kenya

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