For KQ, New York route is a necessary loss making venture

Kenya Airways Managing Director Sebastian Mikosz has scoffed at media reports that the New York route is a profitable venture describing the decision to operate the route as ‘a means to an end’.

The hyped route attracted lots of passengers in November and December last year but the fanfare has faded out this year with the airline struggling to attract enough passengers to make it a profit generating venture.

Speaking during the release of the airline’s 2018 financial results at a Nairobi hotel on Tuesday, Mikosz said that while the route is not making money at the moment, it is a necessary one given it’s value as it will allow the airline to strengthen its West Africa network.

“I was surprised to read an article appearing in a local daily stating that the New York route is a profit generator, nothing could be further from the truth. It is a loss generating venture but we stick with it anyway because of its long term value,” said Mikosz.

According to Mikosz, passenger bookings hit the roof in November and December but that has fizzed out.

“The route is performing within the range that we were expecting there was always going to be the bedding in period.We expect that through 2020, the route will start to pick up,” said Mikosz.

{Read: Kenya Airways plunges to Sh7.5 billion full year loss}

Justifying his point, Mikosz said that the airline was forced to do away with the Hong Kong and Hanoi routes during the year because they made little business sense.

“What we do is that we weigh how much value a route offers us in terms of business or in terms of network. In the case of New York we are confident that it will prove to be a useful coup in the end,” added Mikosz.

Doubts over the route’s viability were raised when the airline stated that it would be reducing the frequency of its flights to five times a week in December.

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“The decision to adjust our schedule is to cater for seasonality in line with global practices that allows airlines to reduce or add frequencies based on low or high seasons,” Mikosz said at the time.