Thursday, April 10, 2008

KQ's 787 dreams




What seemed like a rough year for Kenya Airways year ended last week (March 31). Half year, pre tax profits were 2.8 billion shillings ($43 million) (down from 3.4 billion) the year before. They had lost a new 737-8 aircraft in a crash, had seen fuel reach record highs ($85 a barrel in September) and were being hammered by the strong shilling. Since then we had the dispted election and resultant violence, reduced traffic to Kenya, canceled tourist bookings & flights, while fuel continued to climb ($111) a barrel yesterday.

The start of the new year also off to an unfortunate start with a further delay in Boeing 787 dreamliner program which was the center of the future fleet of KQ - they had ordered nine of the new jets, with the first schedule to arrive in 2010. The 787 was supposed to be delivered to customers last year but is yet to fly and is not expected to be delivered to customers till late next year, meaning KQ as customer No. 28 will probably not get the planes that are critical to their long-term plans until around 2012.

No calls please: Zain (Celtel parent) has successfully tested mobile roaming service on aircraft and says it will soon be available in Nigeria and 10 other countries including Kenya. I hope not, flying should remain mobile free - maybe for text, data only.

7 comments:

egm said...

Agreed! No calls, please. It's bad enough having tantrum throwing toddlers on a long, boring flight. Now they want to add people yabbering away on their phones? Please no! As you say, text and data, fine. Voice, nope!

Mashatall said...

Banks,
I remember questioning KQ's rapid expansion strategy end of 2006, amid a steady increase in oil prices. Gaught a lot of flak from bloggers who felt that their fundamentals were solid, and were on the right track. Well the chickens are coming home to roost, and if naikuni lasts another year at the helm of KQ, then it will be business as usual. I have always admired EABL's strategy, rolling out new products even as they maintain a grip on markets they already command. CEO who keeps off the limelight and effectively runs a profit spewing machine for the shareholders. Cyclical industries have never interested me as an investor, and airlines, tourism and agriculturals fall into that category. But if oil prices fall, then will take a good look at KQ especially if toursim picks up.

bankelele said...

Egm: Nothign is too improtant that it can't wait for a flight to finish. They should jam all phone calls

Mashatall: There's alot of new airline developments in Africa and KQ wanted to be there first with customers, routes and fleet. Maybe they were too ambitious

Eff Dee Eye said...

Mobile phones on a plane nothing short of a nightmare!

I wish there was just one place we could hide with no mobile phones. Unfortunately there is a market out there obsessed with using the gadget I'm afraid it is only a matter of time.

Maybe solution is to keep the costs of making calls while on a plane high (again with competition certainly prices will come down!). We are doomed.

Anonymous said...

It is the night flights, that would worry me, sometimes people have a habit of talking real loud when on the phone, otherwise to be honest they don't bother me, on the train ride to work, have people yammering, but can zone out with my ipod, or even a very intresting book.

On an intresting note, wonder why KQ has only 1 supplier, and if it could get planes from Airbus? Also, could they lease the planes, that some airlines in the American market have pulled from service?

With the coming economic downturn, maybe the delay might be a blessing in disguise.

moskeyto said...

I agree with you anonymous, it could be a blessing in disguise, but on the other hand the delay could be bad because the 787 is supposed to be more fuel efficient, even worse is that the delay is coming at a time when a barrel of oil is at $110. Sadly, none of the planes in service now was designed for a world with expensive energy. That's why the supplier of choice is Boeing. Airbus got lost in the SuperJumbo quagmire and missed out on the chance to produce a fuel sipper. Despite the delays and the airlines' fretting and moaning, they know the wait is worth it and with fuel prices not coming down any time soon, Boeing is right on the ball on this one.

Gitts said...

anonymous one supplier simplifies logistics issues. Why 787, airbus are taking much longer with their A350 programme.
On leasing 767s- it's abit hard to get one on lease right now as they are in high utilization and demand.
The delay could be a bad thing in that there will be increased leasing costs on older aircraft. Old aircraft provide maintenance headaches

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