New Kenya-US direct flight to boost trade by 25 per cent

 

Kenya Airways (KQ) will this evening commence nonstop flights to the United States, which completes a process that has been in the works for more than 10 years.

In February, upon assessment, testing and auditing, JKIA was granted category one status by the US Federal Aviation Administration (FAA) to commence direct flights from Nairobi to New York City.

KQ becomes the fifth carrier in Africa to make direct flights to the US with the other four in what can be termed as an elite club being Ethiopian Airlines, South African Airlines, Egypt Air and Senegal Airlines.

The daily flights is expected to substantially boost the struggling airline to grow revenues as well as enable local industries increase exports to the American market and draw more US tourists to Kenya.

KQ Chief Executive Sebastian Mikosz said the airline is looking to connect the East African region to the East Coast of the United States, with Nairobi serving both as a destination and a hub for people travelling to and from the region.

“We will be offering a big added value to Kenya and the region. We are thinking beyond Nairobi and have our eyes on Sub-Saharan Africa. We will offer connections to numerous cities in the region,” he said in a recent media interview.

“We are aiming to connect the East Coast of Africa and East Coast of the US…We are living in a continent of over a billion people and we are the fifth airline to fly direct to the US. Nairobi will be the seventh city in Africa.”

KQ expects the route to account for 10 per cent of its revenues in 2019, which would translate to about Sh10 billion, going by its performance in 2017. The airline reported revenue of Sh106.28 billion in the year to March 2017.

According to the Kenya Economic Survey 2018, industries engaged in production of goods for export to the US under the African Growth and Opportunity Act (Agoa) initiative employed 44,000 people by December 2017 and exported goods worth Sh32.8 billion to the US.

Total exports to the US stood at Sh47 billion. The Trade ministry is currently evaluating modalities to grow exports under Agoa.

The number of tourists from the US stood at 148,000, contributing a substantial chunk of the 1.24 million tourists to Kenya in 2017.

Kenya Tourism Board Chief Executive Betty Radier said the direct flights will be a major boost to tourist arrivals from the US market, which is currently Kenya’s top source market.

“We expect a 15 per cent increase in arrivals from the American market. Besides, the flight, which will be the first direct flight from East Africa to the US, will strengthen Nairobi as a hub destination for travellers transiting through while heading to the US,” she said.

The direct flights are expected to help grow trade ties and volumes between Kenya and the US thereby augmenting efforts by government to reduce the existing trade imbalance in favour of the US.

The flow of goods and services between the two countries is expected to increase by nearly 25 per cent per year.

More importantly, Kenya has the opportunity to increase access of its goods to the American market and reap the benefits of African Growth Opportunity Act, which accords duty-free exports for selected products.

Non-stop flights between Nairobi and New York will take between 14 and 15 hours. This is in comparison to more than 20 hours on flights currently servicing the route that have stop-overs in other cities in Europe.

For instance, connecting through London takes more than 23 hours while through Amsterdam takes one 24 hours.

KQ joins the likes of Singapore Airlines (SQ), who recently launched an inaugural 19-hour non-stop flight from Singapore to New York on the new Airbus A350-900 ultra long-range jet. SQ’s flight is now considered the longest commercial flight in the world.

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