Magazine article African Business

Kenya Airways: An All-Africa Hub?

Magazine article African Business

Kenya Airways: An All-Africa Hub?

Article excerpt

Kenya Airways stands out as one of the few African airlines that has managed the transition from a sluggish state-owned company to a highly profitable, internationally respected airline and is cited as one of the most successful privatisation cases in Kenya.

Flying out of its hub, Jomo Kenya International Airport in Kenya's capital Nairobi, 'The Pride of Africa' is often affectionately referred to as 'KQ', its calling code.

Kenya Airways was founded in 1977 as a state-owned company and suffered many of the problems typically associated with parastatals that led to a worsening of operational and financial performance. In 1992, the company was technically bankrupt and government set up a committee that set the airline on the path to commercialisation and eventually privatisation.

It began to make its first profits in 1993/1994 and in 1995 the company restructured its debt and entered into an agreement with Dutch airline KLM who bought 26% of KQ and then became the single-biggest shareholder after the state.

KLM retained its 26% stake, and today, after the 1996 flotation on the Nairobi Stock Exchange (NSE), KQ is owned 30.94% by individual Kenyan shareholders, 14.2% by Kenyan institutional investors, 4.47% by foreign institutional investors and 1.39% by individual foreign investors. Government retains a 23% stake. KQ also took a cross-listing on the stock exchanges in neighbouring Kampala, Uganda, in 2002, and in Dar es Salaam, Tanzania, in 2004.

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In 2004, the merger between KLM and Air France further increased KQ's inte rnational network, routed through KLM's Shiphol hub and Air France's Charles de Gaulle airport in Paris-Roissy. …

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