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What is the strategic importance of KQ?
Kusadikika
#1 Posted : Wednesday, March 20, 2019 7:20:47 PM
Rank: Elder


Joined: 7/22/2008
Posts: 2,695
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?
otienosmall
#2 Posted : Wednesday, March 20, 2019 7:56:23 PM
Rank: Member


Joined: 10/8/2010
Posts: 281
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
Fyatu
#3 Posted : Wednesday, March 20, 2019 8:36:08 PM
Rank: Veteran


Joined: 1/20/2011
Posts: 1,820
Location: Nakuru
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


Do you mean that Air Tanzania owns more aircraft than KQ?
Dumb money becomes dumb only when it listens to smart money
tycho
#4 Posted : Thursday, March 21, 2019 3:48:24 AM
Rank: Elder


Joined: 7/1/2011
Posts: 8,804
Location: Nairobi
For me, the Kenya of government policy and the Kenya of Wanjiku expectations are two different Kenyas and the former is always taking advantage of the latter.

That's why sometime back Mutua the governor had to do the 'Naumia kuwa Mkenya' campaign.
hardwood
#5 Posted : Thursday, March 21, 2019 9:32:48 AM
Rank: Elder


Joined: 7/28/2015
Posts: 9,562
Location: Rodi Kopany, Homa Bay
It's like struggling to maintain a cash-draining range rover so as to impress your neighbours.....so that you can be "The Pride of the village". It's an ego thing.
2012
#6 Posted : Thursday, March 21, 2019 2:41:43 PM
Rank: Elder


Joined: 12/9/2009
Posts: 6,592
Location: Nairobi
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?


There's absolutely no strategic value for KQ the way it exists currently. In Moi's time there was but right now, no.

KQ has failed to win the hearts of Kenya as a brand or through price. KQ should be cheaper to Kenyans than other airlines. It will lose greatly to the SGR on local once the line is done to Kisumu.

KQ right now is just a Kenyan souvenir, our 'pride' will not allow us to get rid of it but it has no real value. May be we should ask the 'rich' politicians like you-know-who to buy it...

BBI will solve it
:)
Angelica _ann
#7 Posted : Thursday, March 21, 2019 2:48:18 PM
Rank: Elder


Joined: 12/7/2012
Posts: 11,901
Look at the assets (including humans/households) who will suffer if/when KQ folds. Let us think straight and be humane for once!!!
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
Kusadikika
#8 Posted : Thursday, March 21, 2019 3:18:09 PM
Rank: Elder


Joined: 7/22/2008
Posts: 2,695
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!!!


How many people does KQ employ?

Whatever number they are does it make sense for the rest of Kenyans to pay them so that they can have jobs while they provide services that we could be buying cheaper from other providers?

hardwood
#9 Posted : Thursday, March 21, 2019 3:37:38 PM
Rank: Elder


Joined: 7/28/2015
Posts: 9,562
Location: Rodi Kopany, Homa Bay
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?
tycho
#10 Posted : Thursday, March 21, 2019 3:40:30 PM
Rank: Elder


Joined: 7/1/2011
Posts: 8,804
Location: Nairobi
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!!!


I thought that this was the task of the people entrusted to run it, and the government.

If their thinking and work is sloppy, and even akin to holding Wanjiku at ransom what to do?
Angelica _ann
#11 Posted : Thursday, March 21, 2019 4:09:59 PM
Rank: Elder


Joined: 12/7/2012
Posts: 11,901
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?


That was a private enterprise including personal capital, KQ is a national enterprise. Look at KQ's level of contribution to the economy.
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
tycho
#12 Posted : Thursday, March 21, 2019 5:39:08 PM
Rank: Elder


Joined: 7/1/2011
Posts: 8,804
Location: Nairobi
So KQ's strategic importance is that it's a national symbol that if allowed to be out of use then the country will have no source of pride. And the general state of dissatisfaction will not only be high, but that we may have nothing to lean on.

If this is true then sawa. Let's prop it up folks. Harambeee! Haaaaraaambeee!
Fyatu
#13 Posted : Thursday, March 21, 2019 6:57:47 PM
Rank: Veteran


Joined: 1/20/2011
Posts: 1,820
Location: Nakuru
KQ's strategic importance to me is ogling at pretty Kenyan hostess and drinking at least 4 bottles of Absolute vodka in long flights(>3hrs).I have discovered that you can only pull this stunt(4 100mls vodka bottles) on KQ and not another airline(atleast for me). For me SAA is the worst. I get very upset if an air hostess limits me to 2 bottles of vodka especially when travelling back to NBO and also when they don't communicate with me in sheng/kiswahili
Dumb money becomes dumb only when it listens to smart money
hardwood
#14 Posted : Thursday, March 21, 2019 8:05:13 PM
Rank: Elder


Joined: 7/28/2015
Posts: 9,562
Location: Rodi Kopany, Homa Bay
@admin this thread was meant for the green section. Can you take it back there.
tony stark
#15 Posted : Friday, March 22, 2019 4:53:24 AM
Rank: Veteran


Joined: 7/8/2008
Posts: 947
Too much emotion on this thread.
A few facts.

Kenya is a low middle income country and the middle class is growing. A bigger middle class is a bigger market for KQ from Kenya.

ET and KQ are not on the same level. If ET were to publish their books they would probably be a loss making company as well. Also another point on ET ... this flight that went down, Kenyans were the majority on the flight. We have a bigger middle class despite Ethiopia being twice our size. ET needs Kenyans in their planes to make money.

KQ is a profit center for KAA. No KQ and JKIA can also be loss making as well. Then we will still cough up taxes to run and maintain JKIA.

KQ was profit making and can still be profit making in future. This isn't mumias sugar company where without protection that industry is dead. KQ can and should compete and be profit making.

Direct flight for passengers and cargo are very important.

KQ is a feel good symbol for Kenyans.Is this important yes. Pride of Kenya is important.

KQ is strategic enough for our economy that it should get bailed out until it gets back on it's feet.
the deal
#16 Posted : Friday, March 22, 2019 7:07:00 AM
Rank: Elder


Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
Botswana does not have a national airline but are doing better than most African countries with national carrier's https://en.m.wikipedia.o...tswana_National_Airways
tycho
#17 Posted : Friday, March 22, 2019 9:03:44 AM
Rank: Elder


Joined: 7/1/2011
Posts: 8,804
Location: Nairobi
tony stark wrote:
Too much emotion on this thread.
A few facts.

Kenya is a low middle income country and the middle class is growing. A bigger middle class is a bigger market for KQ from Kenya.

ET and KQ are not on the same level. If ET were to publish their books they would probably be a loss making company as well. Also another point on ET ... this flight that went down, Kenyans were the majority on the flight. We have a bigger middle class despite Ethiopia being twice our size. ET needs Kenyans in their planes to make money.

KQ is a profit center for KAA. No KQ and JKIA can also be loss making as well. Then we will still cough up taxes to run and maintain JKIA.

KQ was profit making and can still be profit making in future. This isn't mumias sugar company where without protection that industry is dead. KQ can and should compete and be profit making.

Direct flight for passengers and cargo are very important.

KQ is a feel good symbol for Kenyans.Is this important yes. Pride of Kenya is important.

KQ is strategic enough for our economy that it should get bailed out until it gets back on it's feet.


So how are these 'facts'?
obiero
#18 Posted : Friday, March 22, 2019 9:17:37 AM
Rank: Elder


Joined: 6/23/2009
Posts: 13,475
Location: nairobi
tycho wrote:
tony stark wrote:
Too much emotion on this thread.
A few facts.

Kenya is a low middle income country and the middle class is growing. A bigger middle class is a bigger market for KQ from Kenya.

ET and KQ are not on the same level. If ET were to publish their books they would probably be a loss making company as well. Also another point on ET ... this flight that went down, Kenyans were the majority on the flight. We have a bigger middle class despite Ethiopia being twice our size. ET needs Kenyans in their planes to make money.

KQ is a profit center for KAA. No KQ and JKIA can also be loss making as well. Then we will still cough up taxes to run and maintain JKIA.

KQ was profit making and can still be profit making in future. This isn't mumias sugar company where without protection that industry is dead. KQ can and should compete and be profit making.

Direct flight for passengers and cargo are very important.

KQ is a feel good symbol for Kenyans.Is this important yes. Pride of Kenya is important.

KQ is strategic enough for our economy that it should get bailed out until it gets back on it's feet.


So how are these 'facts'?

Baseless. Ethiopian economy is larger than Kenya's. Ethiopian Airlines is NOT loss making

HF 30,000 ABP 3.49; KQ 414,100 ABP 7.92; MTN 15,750 ABP 6.45
Angelica _ann
#19 Posted : Friday, March 22, 2019 10:26:43 AM
Rank: Elder


Joined: 12/7/2012
Posts: 11,901
obiero wrote:
tycho wrote:
tony stark wrote:
Too much emotion on this thread.
A few facts.

Kenya is a low middle income country and the middle class is growing. A bigger middle class is a bigger market for KQ from Kenya.

ET and KQ are not on the same level. If ET were to publish their books they would probably be a loss making company as well. Also another point on ET ... this flight that went down, Kenyans were the majority on the flight. We have a bigger middle class despite Ethiopia being twice our size. ET needs Kenyans in their planes to make money.

KQ is a profit center for KAA. No KQ and JKIA can also be loss making as well. Then we will still cough up taxes to run and maintain JKIA.

KQ was profit making and can still be profit making in future. This isn't mumias sugar company where without protection that industry is dead. KQ can and should compete and be profit making.

Direct flight for passengers and cargo are very important.

KQ is a feel good symbol for Kenyans.Is this important yes. Pride of Kenya is important.

KQ is strategic enough for our economy that it should get bailed out until it gets back on it's feet.


So how are these 'facts'?

Baseless. Ethiopian economy is larger than Kenya's. Ethiopian Airlines is NOT loss making


Kenyans were majority because flight terminates in Nairobi and Bole has become a hub for connecting flights in Africa. So those Kenyans were just coming back home yawa Laughing out loudly Laughing out loudly Laughing out loudly
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
KuntaKinte
#20 Posted : Friday, March 22, 2019 3:06:55 PM
Rank: Hello


Joined: 3/22/2019
Posts: 2
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.
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