Mbuvi Ngunze, CEO, Kenya Airways, explains the need for deliberate policies to help boost African aviation and diversity within the industry. Graham Newton reports
How is the airline performing and what are your expectations for the year?
The airline’s performance is improving but we’re coming from a very tough environment over the past few years. There was a perfect storm in terms of the outside challenges we faced, such as poor economic conditions, but we must also admit to our own commercial weaknesses.
I’m sure 2016 will be a turnaround year for the airline. We will still be operating at a loss and there are still challenges, such as the strong US dollar, which affects our cost base. But our development will be clear to see. The airline has a good strategy in place and we should see that beginning to bear fruit in 2016 and improving the airline further in 2017.
How important is SkyTeam to the airline’s business?
It is crucial. We fly into a number of SkyTeam hubs and we leverage the SkyTeam network. It is certainly boosting our passenger numbers, which are at a record high, and that is giving more people the chance to experience our product. About 10%-15% of our passengers come through our SkyTeam partner.
What do you see as the major challenges to Kenya Airways’ growth?
There is no question that we need to improve the infrastructure in Kenya and in Africa generally. That means more investment in, and better management of, both airports
If you take Nairobi as an example, we are only just beginning to see the semblance of a proper terminal structure after the fire Jomo Kenyatta International Airport suffered in 2013. Finally, we are getting a hub that we are able to sell.
As for Africa as a whole, there needs to be much more investment on the ground and in the sky to improve efficiency. The continent is an expensive place to do business. And that will make it tough for any African carriers to achieve sustainable profitability.
How are you looking to expand your network?
Today, 60% of our revenue is generated in Africa. We will keep that focus. As an African carrier, clearly the continent is going to be the source of most of our revenue going forward. We need to make sure we can connect Africa through our hub and leverage that connectivity to places that we serve internationally, especially SkyTeam hubs and other destinations served by our SkyTeam partners.
Do the visa restrictions in Africa affect your decisions?
I would love to see an Africa that operates visa-free. Most countries are many decades on from independence but we still have visa restrictions in place across most of Africa, despite governments saying they want the free movement of people. For me, this is a priority. Removing visa requirements would stimulate the movement of people and goods in Africa and boost economies.
Governments cite security concerns but these should be handled by the security organizations. It should not be used as an excuse to unnecessarily restrict freedom of movement.
The point is that you cannot make the most of connectivity if you do not have visa-free regimes. Being visa-free and loosening the many restrictive regulations would encourage African carriers to partner more. That would make a big difference because many African routes are very thin. In turn, we could then look at the aircraft we fly and gain further efficiencies in that way.
What else can the African governments do to allow aviation’s benefits to take effect?
There are a number of areas where governments can assist the industry and so develop their own economies. Take fuel taxes and fuel policy. The aviation fuel price in Africa is generally at least double the world average. Also, ground handling is often a monopoly and so costs are high. And we have talked about the infrastructure.
Governments need to understand the effect their aviation policies have on the benefits of the industry, including GDP and job growth. Even in Kenya, there is a misalignment between government policy and aviation growth and that is holding back our ability to develop. The way Singapore has grown shows what a positive aviation policy can do for a country. There must be a more systematic approach to air transport policy.
Can more be done for African safety?
You can always do more but African carriers have done a lot of work already. They deserve a lot of credit because they have invested heavily in safety improvements and we all understand that safety is our license to operate.
The African Airlines Association (AFRAA) is also playing its part and its regulations have been changed so that any carrier wishing to join has to be on the IATA Operational Safety Audit (IOSA) registration list. Carriers are also cooperating more on safety issues. Kenya Airways works with other carriers to help them get IOSA registration and to improve their safety generally.
But again, governments must play their part in the regulations they pass and enforce, and the aircraft they allow to be registered and used.
Even so, it is a positive story and the improvement in the African safety record speaks for itself.
Diversity within the industry has become a hot topic. What is the airline doing in this respect?
Aviation is a diverse industry and Kenya Airways is certainly a diverse organization. We have about a 50-50 mix between men and women. But this mix doesn’t apply across all departments.
We need more female engineers, for example, and we are studying how we can attract them. It is an opportunity to think about how we are presenting the industry to potential recruits. It is also about education and trying to convince more girls to take an interest in science subjects.
We have not done a bad job when it comes to pilots. Out of some 450 pilots, about 50 are female. And the first female 787 pilot worldwide was trained at Kenya Airways.
So we are doing well, but it is something on which you have to have a deliberate policy. We shouldn’t be leaving it to chance.
Tell us about the industry initiative to prevent illegal trade in wildlife and your decision to take a lead role?
First, I want my children and my grandchildren to have something left to enjoy. But also, if I think about the future and why people will come to Africa, aside from the beaches and the weather, wildlife is the crucial factor.
So it is important to be involved for those two reasons. We owe it to future generations to protect what we have today. So we all need to contribute and ask how we can work together.
The fact is that there is illegal wildlife trafficking in many areas of Africa. And if we can do something as an industry then we must do it. We should be at the forefront.
Of course, we are not the enforcers, but we can do a lot in terms of awareness. Kenya Airways markets extensively to its passengers and we make sure our staff are knowledgeable. We cooperate with the wildlife authorities and the police, and we lobby through international organizations.
IATA is important to us because it helps the airline to lobby on many of the issues I have mentioned. The cost of doing business in Africa is one example and improving connectivity and the potential for partnership across the continent is another.
It is also working to free blocked funds, which is important to African carriers when profit margins are so tight.
In short, IATA is driving the maturity of the African industry through its efforts.