Wazua
»
Investor
»
Economy
»
What is the strategic importance of KQ?
Rank: Elder Joined: 2/26/2012 Posts: 15,980
|
Very well put. "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore .
|
|
Rank: Member Joined: 5/22/2014 Posts: 321 Location: Ndeiya
|
KuntaKinte wrote:Let me try and explain how strategic KQ is:
I’m in the IT/Telco industry working for an multinational technology vendor. I and many people in our industry use KQ to cover Africa, with Nairobi as our hub. The IT/Telco sector alone is huge, with big notable vendors such as Oracle, Microsoft, Cisco, Huawei, Nokia, Ericsson, CheckPoint, IBM, etc. Huge distributors who follow these vendors are also based in Nairobi, likes of Westcon/Comstor, Redinton, DataGroup, etc. Of course the end users too who have operations in several countries in Africa. All these need a proper air transport infrastructure and an airline. That’s where KQ comes in.
Now, this is just IT/Telco, talk of banking, audit/tax services(KPMG, PWC, EY, Deloite), medical sector(Novartis, Roche, etc), energy(GE, Scheneider, Siemens, etc), the UN and its bodies, manufacturig(CocaCola, Unilever, etc)etc. All these are hubbed in NRB, with KQ a big factor why they are here and of course other factors.
I will typically do about 45-55 flights per year mostly around Africa. I cannot use any other airline with that kind of travel. Trying to use Bole or Kigali as a hub is just unsustainable and would only lead to travel fatigue. Trust me, there are many like me who must take the most direct flight as travel policy.
To also clirify, if you did not know, the most direct flight is always expensive since it’s more convenient. That’s how airline pricing is done. The flight that is most inconvenient with long layovers and multiple hops is always cheaper. That’s why to Kenyans, KQ will always be more expensive than other options. If you use KQ flight to and from Bole, you’ll notice a number of Ethiopians on board. Now you know why. The Lagos - Nairobi flight is quite busy with transit passengers to Joburg, while SAA flies directly from Joburg to Lagos. That’s how airlines work.
Now that’s why KE govt will do whatever is in its powers to protect KQ. It’s unbelievably strategic to our economy. If you look at the idea behind SGR, Roads, education, electricity, etc similar strategic importance such that only a government can invest in such...I know value for money is another coversation all together. Such investment should not necessarily be profitable, they are enablers of the rest of the economy.
Nigeria with its huge market and educated population is seriously deficient in infrastructure, and that’s how come much smaller countries like Kenya end up being hubs covering West Africa.
I hope I’ve done justice to this topic. And you just joined the family. Karibu sana.
|
|
Rank: Member Joined: 1/18/2019 Posts: 185 Location: kenya
|
KuntaKinte wrote:Let me try and explain how strategic KQ is:
I’m in the IT/Telco industry working for an multinational technology vendor. I and many people in our industry use KQ to cover Africa, with Nairobi as our hub. The IT/Telco sector alone is huge, with big notable vendors such as Oracle, Microsoft, Cisco, Huawei, Nokia, Ericsson, CheckPoint, IBM, etc. Huge distributors who follow these vendors are also based in Nairobi, likes of Westcon/Comstor, Redinton, DataGroup, etc. Of course the end users too who have operations in several countries in Africa. All these need a proper air transport infrastructure and an airline. That’s where KQ comes in.
Now, this is just IT/Telco, talk of banking, audit/tax services(KPMG, PWC, EY, Deloite), medical sector(Novartis, Roche, etc), energy(GE, Scheneider, Siemens, etc), the UN and its bodies, manufacturig(CocaCola, Unilever, etc)etc. All these are hubbed in NRB, with KQ a big factor why they are here and of course other factors.
I will typically do about 45-55 flights per year mostly around Africa. I cannot use any other airline with that kind of travel. Trying to use Bole or Kigali as a hub is just unsustainable and would only lead to travel fatigue. Trust me, there are many like me who must take the most direct flight as travel policy.
To also clirify, if you did not know, the most direct flight is always expensive since it’s more convenient. That’s how airline pricing is done. The flight that is most inconvenient with long layovers and multiple hops is always cheaper. That’s why to Kenyans, KQ will always be more expensive than other options. If you use KQ flight to and from Bole, you’ll notice a number of Ethiopians on board. Now you know why. The Lagos - Nairobi flight is quite busy with transit passengers to Joburg, while SAA flies directly from Joburg to Lagos. That’s how airlines work.
Now that’s why KE govt will do whatever is in its powers to protect KQ. It’s unbelievably strategic to our economy. If you look at the idea behind SGR, Roads, education, electricity, etc similar strategic importance such that only a government can invest in such...I know value for money is another coversation all together. Such investment should not necessarily be profitable, they are enablers of the rest of the economy.
Nigeria with its huge market and educated population is seriously deficient in infrastructure, and that’s how come much smaller countries like Kenya end up being hubs covering West Africa.
I hope I’ve done justice to this topic. This is exactly it! For business travel & trade KQ is very strategic to Kenya. That direct connection especially in Africa is key. If there is sensible management that can get it to a turnaround I support the govt cushioning KQ a little with the aim of getting it back to profitability then it can be inviting enough for a Qatar or something to buy a majority stake in.
|
|
Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
|
nairobby wrote:KuntaKinte wrote:Let me try and explain how strategic KQ is:
I’m in the IT/Telco industry working for an multinational technology vendor. I and many people in our industry use KQ to cover Africa, with Nairobi as our hub. The IT/Telco sector alone is huge, with big notable vendors such as Oracle, Microsoft, Cisco, Huawei, Nokia, Ericsson, CheckPoint, IBM, etc. Huge distributors who follow these vendors are also based in Nairobi, likes of Westcon/Comstor, Redinton, DataGroup, etc. Of course the end users too who have operations in several countries in Africa. All these need a proper air transport infrastructure and an airline. That’s where KQ comes in.
Now, this is just IT/Telco, talk of banking, audit/tax services(KPMG, PWC, EY, Deloite), medical sector(Novartis, Roche, etc), energy(GE, Scheneider, Siemens, etc), the UN and its bodies, manufacturig(CocaCola, Unilever, etc)etc. All these are hubbed in NRB, with KQ a big factor why they are here and of course other factors.
I will typically do about 45-55 flights per year mostly around Africa. I cannot use any other airline with that kind of travel. Trying to use Bole or Kigali as a hub is just unsustainable and would only lead to travel fatigue. Trust me, there are many like me who must take the most direct flight as travel policy.
To also clirify, if you did not know, the most direct flight is always expensive since it’s more convenient. That’s how airline pricing is done. The flight that is most inconvenient with long layovers and multiple hops is always cheaper. That’s why to Kenyans, KQ will always be more expensive than other options. If you use KQ flight to and from Bole, you’ll notice a number of Ethiopians on board. Now you know why. The Lagos - Nairobi flight is quite busy with transit passengers to Joburg, while SAA flies directly from Joburg to Lagos. That’s how airlines work.
Now that’s why KE govt will do whatever is in its powers to protect KQ. It’s unbelievably strategic to our economy. If you look at the idea behind SGR, Roads, education, electricity, etc similar strategic importance such that only a government can invest in such...I know value for money is another coversation all together. Such investment should not necessarily be profitable, they are enablers of the rest of the economy.
Nigeria with its huge market and educated population is seriously deficient in infrastructure, and that’s how come much smaller countries like Kenya end up being hubs covering West Africa.
I hope I’ve done justice to this topic. This is exactly it! For business travel & trade KQ is very strategic to Kenya. That direct connection especially in Africa is key. If there is sensible management that can get it to a turnaround I support the govt cushioning KQ a little with the aim of getting it back to profitability then it can be inviting enough for a Qatar or something to buy a majority stake in. Not convincing...Kenyan government own and operate JKIA...even if KQ was to cease operating today...someone else will fly you to your destination tomorrow....KQ does not make Kenya the hub...its the airport itself...who owns JKIA? GoK...JKIA is the only strategic asset here...GoK must not mess it up...
|
|
Rank: Elder Joined: 2/26/2012 Posts: 15,980
|
And it should register to people that Govt is not a kiosk. Even those dams that are gobbling more money than the SGR have no REIT. How are they of strategic importance to Kenya? "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore .
|
|
Rank: Elder Joined: 12/7/2012 Posts: 11,908
|
murchr wrote:And it should register to people that Govt is not a kiosk. Even those dams that are gobbling more money than the SGR have no REIT. How are they of strategic importance to Kenya? Employment and food security. In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
|
|
Rank: Elder Joined: 2/26/2012 Posts: 15,980
|
Angelica _ann wrote:murchr wrote:And it should register to people that Govt is not a kiosk. Even those dams that are gobbling more money than the SGR have no REIT. How are they of strategic importance to Kenya? Employment and food security. How have the existing dams contributed to food security? "There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore .
|
|
Rank: Hello Joined: 3/22/2019 Posts: 2
|
I had to join and comment to give my perspective and clarify many misinformations.
If you did know, that’s why KE economy is so reselient despite the many goofs by the government. In SubSahara Africa outside ZA, KE has a number of factors to our advantage that are not elsewhere; Airline(KQ), Airport, Roads, world-class offices, now Trains, well trained and globally thinking workforce, vibrant financial sector, stable political environment, vibrant and innovative private sector, enterpreneruial spirit in Kenyans, an almost institutional economy, etc
That’s why despite all of our challenges, Kes vs $ has been stable and actually gained against $. KQ and JKIA is at the heart of KE economy.
I’ve been fortunate to travel in much of Africa, and I can tell you KE has a couple of factors to our advantage which other countries just wish they can have. If you look at ET, they have an airline only to show, same as RW. NG have the size of the market, that’s why they have the Dangotes, Zenith Bank, etc. ZA have a number of advantages that unfortunately they’ve been wiping off almost irreparablebly.
So my friends KQ is our friend and deeply ingrained in the KE economy.
|
|
Rank: New-farer Joined: 2/26/2018 Posts: 17
|
otienosmall wrote:Kusadikika wrote:I have put this in the politics section because that is where it belongs. Why do taxpayers have to pay for KQ losses?
Does KQ carry our flowers to European markets at a loss so that if we did not own then the flower industry would suffer?
Does it serve a national security function? Would the country be at risk of something if we did not have our own carrier?
Does it fly Kenyans at a discount? and even if it did is it the most competitively priced airline to most destinations out of Nairobi?
What would we suffer as country if we sold KQ to Emirates or Qatar or someone else who knows how to handle that business? Sometimes back I flew KQ NBO-Johannesburg, South Africa (JNB) return and paid 72k. Then I discovered Ethiopian airline and Rwandair as cheaper alternatives for the same route and comfort if not better. For the later two I spend circa 40k almost half of what KQ charges. I wonder then how they claim to make loses. What amazes me is that KQ planes for such routes are always fully booked; probably by government employees coz for most people it doesn’t make economical sense to fly KQ when better alternatives exists Why does KQ charge so exorbitantly in comparison to other players? What kind of business model did they adapt- too shitty that after all these years in operation they only own like 4 planes? I am sure this is by design to make it a cash cow for some fellows who lease the planes to them of course at astronomical rates I am actually surprised that this thread has grown to this lenght without questioning some of the 'facts' displayed here. This common narrative that KQ owns four planes is false and baseless. Most do not understand that most airlines even the most profitable ones use wet-leases. A better argument would be to critic the use of SPV for the wet-lease instead of KQ doing the wet-lease directly. But this idea that KQ owns 4 planes is 'fake news' . Plane ownership is not even the most important thing. It is a very risky asset to own. Ask that crook Ngunze when he was trying to get rid of the 777's-ER
|
|
Rank: Member Joined: 9/11/2014 Posts: 228 Location: Nairobi
|
guka wrote:otienosmall wrote:Kusadikika wrote:I have put this in the politics section because that is where it belongs. Why do taxpayers have to pay for KQ losses?
Does KQ carry our flowers to European markets at a loss so that if we did not own then the flower industry would suffer?
Does it serve a national security function? Would the country be at risk of something if we did not have our own carrier?
Does it fly Kenyans at a discount? and even if it did is it the most competitively priced airline to most destinations out of Nairobi?
What would we suffer as country if we sold KQ to Emirates or Qatar or someone else who knows how to handle that business? Sometimes back I flew KQ NBO-Johannesburg, South Africa (JNB) return and paid 72k. Then I discovered Ethiopian airline and Rwandair as cheaper alternatives for the same route and comfort if not better. For the later two I spend circa 40k almost half of what KQ charges. I wonder then how they claim to make loses. What amazes me is that KQ planes for such routes are always fully booked; probably by government employees coz for most people it doesn’t make economical sense to fly KQ when better alternatives exists Why does KQ charge so exorbitantly in comparison to other players? What kind of business model did they adapt- too shitty that after all these years in operation they only own like 4 planes? I am sure this is by design to make it a cash cow for some fellows who lease the planes to them of course at astronomical rates I am actually surprised that this thread has grown to this lenght without questioning some of the 'facts' displayed here. This common narrative that KQ owns four planes is false and baseless. Most do not understand that most airlines even the most profitable ones use wet-leases. A better argument would be to critic the use of SPV for the wet-lease instead of KQ doing the wet-lease directly. But this idea that KQ owns 4 planes is 'fake news' . Plane ownership is not even the most important thing. It is a very risky asset to own. Ask that crook Ngunze when he was trying to get rid of the 777's-ER Which 'facts' are you challenging? The number of planes or the importance attached to owning planes? So how many planes does KQ have?
|
|
Rank: New-farer Joined: 2/26/2018 Posts: 17
|
Sides of the same coin. The reason as to why even this has been brought up is because some think that full ownership(fully paid for as how they refer to it) is important. The value being placed in fully owning aircraft is based on the thought that fully owning an entire fleet is the holy grail or requirement to run successfully. The fact thay KQ is still making leasing payments for 17 planes in their fleet does not mean they are not assets in their books. Taking an asset finance loan does not make you less owner or non owner. In markets like the US people rarely fork out a big check to buy a car. You make monthly payments also giving you more flexibility if you want to get rid of it in 3 years and get a newer version. So saying they only own 4(actually 3 as this is what is fully paid for) is disingenuous when in reality they are making payments for 17 other planes.
Lastly, one needs a mix of leased planes and fully owned planes, and other on some asset finance arrangement on the way to full ownership. I am surprised most have not used this same argument against Jambo Jet which only operates leased planes.
|
|
Rank: Chief Joined: 1/3/2007 Posts: 18,095 Location: Nairobi
|
hardwood wrote:Angelica _ann wrote:Look at the assets (including humans/households) who will suffer if/when KQ folds. Let us think straight and be humane for once!!! Recently you told us about a lady who abandoned poultry farming because she was making loses and instead opted to outsource eggs. Are you now saying the lady should have been humane and continued to sink more cash into the enterprise so as to keep her farm workers and feed suppliers happy and employed? Hard Tackle! Also keep Uchumi open. And Mumias. And NBK. Why not bail out Nakumatt to save the jobs of the 100s of workers? Or ARM? Or any failing firm? Don't leave out Chase Bank and Imperial Bank. Just tax the taxpayers a little more. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
|
|
Rank: Elder Joined: 12/4/2009 Posts: 10,678 Location: NAIROBI
|
Corruption,looting and mediocracy won't allow kq to recover Wealth is built through a relatively simple equation Wealth=Income + Investments - Lifestyle
|
|
Rank: Hello Joined: 5/4/2016 Posts: 2 Location: Kenya
|
Inability to run the airline is not the same as the airline is useless. The notion being peddled around that Kenya Airways shouldn't be bailed out is insincere. The airline cannot only be seen from the prism of profits. As a matter of fact, some of the noisiest people here don't fly the airline, aren't employed by the airline and certainly don't own a piece of the airline except through GoK, therefore they would only be discussing the airline from a ticket cost standpoint.
Kenya Airways isn't in the business of owning aircraft. If they could fly you in a hot-air balloon to Cairo, safely, efficiently and on time, they would do it. Business in Kenya prevails inspite of Government. Not because of it. In this very rare occassion that Government is willing to come in, let it do so.
What is the opportunity of cost of not having the airline?
|
|
Rank: Member Joined: 6/6/2016 Posts: 165 Location: Nairobi
|
Ericsson wrote:Corruption,looting and mediocracy won't allow kq to recover This and this here. All other arguments is only verbal gymnastics
|
|
Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
|
777 wrote:Inability to run the airline is not the same as the airline is useless. The notion being peddled around that Kenya Airways shouldn't be bailed out is insincere. The airline cannot only be seen from the prism of profits. As a matter of fact, some of the noisiest people here don't fly the airline, aren't employed by the airline and certainly don't own a piece of the airline except through GoK, therefore they would only be discussing the airline from a ticket cost standpoint.
Kenya Airways isn't in the business of owning aircraft. If they could fly you in a hot-air balloon to Cairo, safely, efficiently and on time, they would do it. Business in Kenya prevails inspite of Government. Not because of it. In this very rare occassion that Government is willing to come in, let it do so.
What is the opportunity of cost of not having the airline?
So you joined Wazua in 2016 but made your maiden post on a KQ thread today. We see your sincerity Life is short. Live passionately.
|
|
Rank: Member Joined: 1/15/2010 Posts: 625
|
KQ is a strategic asset of the Republic of Kenya. Saying that we don't need it, is like cutting your nose to spite your face or throwing out the baby with the bath water. KQ creates a tremendous amount of value for the country and especially for the GoK than can be measured by the profits or losses it generates internally. KQ could be losing money as a company but the country or GoK still comes out net positive. This is because of the second order effects of having a functional airline. Measuring KQ purely on the profits or losses it generates internally is like measuring the value of a road purely on the amount of toll collected on it. It's very short sighted. Having said that, we need a well managed, functional national airline free of corruption. No one disputes that. What we need to focus on is to put in place the right structures and investment to make that work.
|
|
Rank: Hello Joined: 5/4/2016 Posts: 2 Location: Kenya
|
sparkly wrote:777 wrote:Inability to run the airline is not the same as the airline is useless. The notion being peddled around that Kenya Airways shouldn't be bailed out is insincere. The airline cannot only be seen from the prism of profits. As a matter of fact, some of the noisiest people here don't fly the airline, aren't employed by the airline and certainly don't own a piece of the airline except through GoK, therefore they would only be discussing the airline from a ticket cost standpoint.
Kenya Airways isn't in the business of owning aircraft. If they could fly you in a hot-air balloon to Cairo, safely, efficiently and on time, they would do it. Business in Kenya prevails inspite of Government. Not because of it. In this very rare occassion that Government is willing to come in, let it do so.
What is the opportunity of cost of not having the airline?
So you joined Wazua in 2016 but made your maiden post on a KQ thread today. We see your sincerity The winning principle has always been to talk less and read more
|
|
Wazua
»
Investor
»
Economy
»
What is the strategic importance of KQ?
Forum Jump
You cannot post new topics in this forum.
You cannot reply to topics in this forum.
You cannot delete your posts in this forum.
You cannot edit your posts in this forum.
You cannot create polls in this forum.
You cannot vote in polls in this forum.
|