Despite low fuel costs and the global airline industry running profitable operations, Kenya Airways has recorded multiple years of losses, leading the company to consider a recovery strategy that includes selling aircraft and shedding jobs.
East African air carriers could benefit from industry rationalisation, but domestic political concerns could obstruct regional reforms.
Low-cost carriers have emerged in Africa but struggle to make headway against publicly owned airlines.
Once Kenya Airways exits fuel-hedging commitments, lower prices should improve profit margins.
Without airline liberalisation and local carrier rationalisation, foreign airlines will benefit most from growing African air travel.
Government protectionism, high taxes and regulation will restrict competition, especially from low-cost carriers.
