Ethiopian appears clearly intent to take the battle for continental superiority to rivals Kenya Airways with the doubling of the flights and it is yet to be seen how Kenya Airways will respond to this bold move of invading their own patch in such an expansionist manner.
Ethiopian was of course the erstwhile Pan African carrier, connecting the continent via Addis Ababa, also the city where the African Union and its predecessor the Organisation of African Unity, in short OAU, is headquartered. Flying with Ethiopian spared African travelers the trip to distant Europe only to connect back into another part of Africa at a time when there were but few options to fly from East to West and from South to North.
ET’s concept to feed and de-feed traffic via their Addis hub and then carry passengers, even from way back in the 1970’s to for instance Beijing, combined with having traffic rights into North America for many years now, did clearly inspire other airlines on the continent to roll out similar strategies, especially as the African economies continued to grow, offering an expanding pool of passengers to compete over.
Kenya Airways certainly took a hint when they announced two years ago that by the end of 2015 they would want to connect from their own hub in Nairobi to every political and commercial capital across Africa, while at the same time expanding their network into Europe, the Gulf, to India and into the Far and South East.
The immediate battle between in particular those two airlines will be fought on several fronts, the pace of delivery of new aircraft, the pace of rolling out new destinations, the linkage with a global airline alliance, the creation of partnership airlines in Africa and the hitherto restricted access by Kenya Airways to the North American market place due to a lack of Category 1 certification by the American FAA. This latter point is something the Kenyan government and the Kenya Airport Authority need to address by creating aviation infrastructure which meets such requirements, but for the rest, it is up to the two airlines and their top management to slug it out.
Ethiopian will this year alone take delivery of a further 5 B787 Dreamliners – they already got 5 of these state of the art birds flying – and a further 2 B777-300ER’s, of which they already operate two with a further 6 B777-200LR in the fleet. In contrast does Kenya Airways expect delivery of one B777-300ER, making it two such aircraft besides their 4 B777-200ER, and 5 more B787 Dreamliners, following the arrival of their first such aircraft on April 05th.
Kenya Airways presently operates a fleet of 6 B767-300ER’s, all due for retirement by the end of this year, while Ethiopian, after equipping most of their B767 fleet with blended winglets to reduce fuel consumption, operates 12 which will be due for retirement by the 2017/18 period. The fleet size of the two airlines also shows the advantages for Ethiopian at this stage, with Kenya Airways operating 45 aircraft to 56 destinations while rival ET operates 62 aircraft to 80 destinations. Notably does ET also have 14 Airbus A350-9 on order, due for delivery from 2017 onwards, again cementing the numerical advantage of aircraft projected to fly for them. It was also learned that ET is in talks with Boeing about the acquisition of up to 10 of the brand new B777X, which is presently under development and will eventually complement if not replace the current B777 models. Kenya Airways in their strategic plan intends to operate an overall fleet of 119 aircraft, including freighters, to then 115 destinations by the year 2022, a notice of intent that they are serious in competing for Africa’s number one airline spot. No such longer term forecast is presently available from Ethiopian at this time but it is thought that they will roll out a similar expansion to retain their current advantage in terms of aircraft and destinations.
On the destination front Ethiopian just launched flights to Shanghai, their 4th destination in China, while Kenya Airways will only be able to follow suit later in the year when they also intend to launch flights to Beijing, which then makes 3 destinations including Guangzhou. Vienna will be added as another European destination for ET in a few weeks’ time, to be followed later in the year with planned flights to Tokyo, Los Angeles, Madrid, Manila and Jakarta, while Kenya Airways is restoring flights to Paris in June but not yet Rome which was dropped last year.
Moving on to the alliance issue, where again Ethiopian is one of three airlines in Africa belonging to market leader Star Alliance, the other two carriers being South African Airways and Egypt Air, effectively covering the continent like none of Star’s rivals does. Kenya Airways is a member of SkyTeam and the only such member in Africa at present, showing the added traffic potential of Star Alliance over SkyTeam when it comes to the number of airports served and passengers carried into Africa as a result of strategic code share arrangements and commercial partnerships.
The last but not the least area of continental rivalry can be seen vis a vis the partner airlines, where Ethiopian presently holds significant equity in West Africa’s ASKY and in Malawi’s new national carrier Malawian Airlines. Plans are also afoot by ET to launch another equity partner airline in the Congo DR, where a huge potential exists for passengers finally having another option of a quality airline serving the sprawling country. When Malawian started operations, Kenya Airways’ fifth freedom rights between Lilongwe and Lusaka were promptly cancelled, an example of how equity partnerships can be used for a direct commercial advantage. Kenya Airways in contrast, apart from launching a 100 percent subsidiary on the 01st of April, a low cost carrier by the name of Jambojet, which now serves four domestic destinations and has already announced that flights into the wider region are due to follow as the operation settles down and the fleet grows, has no expressed plans at this moment to seek equity partnership with other African airlines, existing or start up’s, leaving that field also to Ethiopian.
The combination of all these factors will no doubt influence the future development of aviation in Eastern Africa and the continent at large as the strategists are pitted against each other. In Kenya another game changer will come into play as long serving CEO Dr. Titus Naikuni is due to retire by the end of the year, after serving in that position since early 2003, and whoever will take over from him will have his work cut out to lead Kenya Airways to a level par against Ethiopian, which is in the capable hands of Tewolde Gebremariam. He took over in September 2010 from Girma Wake, ensuring continuity at the top level. Tewolde looks back at nearly 30 years of service at Ethiopian Airlines and can best be described as an old fox when it comes to aviation in Africa, such as been there, done that and got the award cabinet to prove it.
Competition, or so goes the saying, is good for the market but competition in Africa is sadly not restricted to battling it out for market share between African airlines alone. Increasingly are the African skies now the battleground where African carriers, besides being in an often cut throat struggle for market share among themselves, now face the Gulf giants which have been given almost unlimited market access by African governments, often to the detriment of their own as well as of other African airlines. Emirates, Qatar, Etihad, Air Arabia and Fly Dubai all have made inroads into the African market, the latter two being LCC’s and still relatively limited in their range of African destinations. All of them offer state of the art fleets, and the big league players offer global connectivity via their hubs in Dubai, Doha and Abu Dhabi and are renowned for their service levels and frequent flyer perks. It is here that African airlines, as incidentally suggested by Kenya Airways’ CEO Dr. Titus Naikuni at the IATA Convention in Cape Town last year, need to examine areas where cooperation is possible, where co-ompetion is the desirable way forward in order to stem the outflow of passengers to non-continental airlines and thereby dimming the prospects of our own leading airlines to eventually rise to similar levels in terms of fleet and destinations. Exciting times ahead for sure in Kenya, in Ethiopia and across the continent, giving the pundits much to speculate over and regular aviation observers and journalists much to write about.
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