The African aviation industry is on the cusp of transformation, with market projections indicating a compound annual growth rate (CAGR) of 13.56 per cent from 2024 to 2025 and a market volume reaching approximately $2.01 billion by 2025. As low-cost carriers and established airlines expand their networks, the spotlight is on untapped markets, digital innovation, and sustainability. CNBC Africa's Tabitha Muthoni spoke to Julius Thairu, Chief Commercial & Customer Officer at Kenya Airways.
The African aviation industry is on the cusp of transformation, with market projections indicating a compound annual growth rate of 13.56 per cent from 2024 to 2025 and a market volume reaching approximately $2.01 billion by 2025. As low-cost carriers and established airlines expand their networks, the spotlight is on untapped markets, digital innovation, and sustainability. I earlier spoke to Julius Thairu, Chief Commercial & Customer Officer at Kenya Airways. Let us listen in. That in 2023 will be operationally viable, operationally profitable, which we achieved in 2023. And then in 2024, we committed to finally breaking even. And it's been long coming, I think, 11 years. And in June, we reported last year, a profit for the first time in 11 years, which is a big milestone. And that has not gone unrecognized. Because in the same year, we've been fitted with a number of accolades, a number of awards. If I just mention just a few, you know, the World Travelers Awards, you know, recognized KQ as the leading airline in Africa. Also here in Kenya, we were recognized by our government as the brand ambassador. That was a brand ambassador award that we were given by the government for championing Kenya in the global space and for selling Kenya. And we also won other awards, especially in the space of technology. And I'll touch on to those as we, you know, go along in this interview. So we are happy that our efforts are being recognized by our customers. And it gives us even more energy, more strength to move forward and transform the organization. If now I come to you a question on what we are seeing in Africa, first of all, the good news is demand overall remains robust, you know, coming out of COVID. You know, in 2023, Africa surpassed COVID levels, and we continue to see demand in travel. In fact, IATA, which is the International Air Transport Association, has forecasted a 6 to 7% growth in traffic overall globally. And part of that will be coming here from Africa. Africa remains also an underserved continent. If we look at, you know, Africa contribution to the global air travel is only about 2%, which, of course, offers an opportunity, especially for Africa Airlines, to really play their part to open up the continent, which is key to the development that we need to see in Africa, because, of course, aviation is a catalyst of economic development. So as Kenya Airways, we play a significant role in Africa. We currently fly to 35 cities in the continent. And what we are doing in 2025 is we are densifying ourselves, meaning we are adding more frequencies to some of those destinations that we fly to, because additional frequencies gives people flexibility. For example, I know you're in Kigali. We currently fly three times a day. We are looking to even add more frequencies to Kigali, because that gives our customers flexibility and choice when they need to travel. They can choose to travel in the morning, or they can choose to travel in the evening. So across East Africa, we'll be increasing frequencies in most of the key markets. Also down south, especially Johannesburg and Cape Town, our two key big destinations, we'll also be adding capacity. And also, we are opening up and increasing frequencies in a number of our leisure destinations, whether this is Seychelles, Mauritius, you know, what we call vanilla islands. And why specifically we are doing this is because we continue to see a strong appetite, and especially with the new generation, Gen Z, a strong appetite to travel. In fact, there's a new consumer behavior that is coined as Be Leisure, where people are combining, you know, travel and leisure. And I think lastly, where we also see demand outside Africa is for us two key destinations. One is we are opening a new destination in UK, Gatwick, which is in London. So we'll have a second point in London. So we'll open up Gatwick in July, flying three times a week on Wednesdays, Fridays, and Sundays. Again, this will be a good addition, because we see a lot of demand into UK, but also more importantly, out of UK into Kenya, supporting tourism and into Africa. The other key destination where we are adding frequencies we fly today is Thailand and China, that's Bangkok and Guangzhou. We'll be flying daily to those two destinations. So Tabula overall, again, we see, you know, quite a robust environment, demand is growing, I think, you know, middle class is growing in Africa, but there's hunger to connect Africa more, to spur more economic development, trade and tourism. Yes, Julius, let us look at financial strategies in the aviation industry and also balancing the dual goals of supporting emerging markets and advancing sustainable aviation practices. A good question. First of all, if I just start at who we are, of course, as a company, our vision is to be, you know, a preferred and a sustainable aviation group. So sustainability is at the center of our strategy and who we are. And for us, to put this in context, when we look at sustainability, we look at it more in a broader context. There's the environmental element that is key, that is important. We have to play our part. And especially because, you know, tourism is a key part of our GDP in Kenya and in Africa. And so we have to conserve our environment. But also we look at the economic aspect and also the social aspect of sustainability. The economic aspect is key for us. And it starts with KQ being a viable and a profitable organization. And this is why we are putting in a lot of work to make sure that we are a sustainable business that gives value to Africa and contributes to that sustainable development of Africa or prosperity of Africa. And then from a social bit, we are also very keen at driving women empowerment within our own company. We've got a leadership program that accelerates women into leadership position. This is also broader within our alliance. We are part of Sky Team Alliance, where, you know, we also work together on really identifying talent and, you know, women who are talented. But also making sure that we are accelerating their growth. Also, when it comes to diversity and inclusion, you know, differently abled individuals, we've got an open policy, you know, to encourage them to join the organization. I think recently we announced our first, you know, cabin crew, you know, with an albino condition. So they're actually serving on our flight. And we're very deliberate to give opportunities to everyone within the business because inclusion and diversity is very important for us. And when it comes to the environmental aspect, it is something that we cannot ignore because especially if we look at today's, especially new generation, again, if we go to Generation Z, but also post-COVID, human beings have become more conscious of their environment and the need to preserve the environment. So even as we work with companies, with partners, you will find, you know, this is being prioritized. Everybody wants to understand what is it you're doing in that space. So as Kenya Airways, there are a couple of things we are doing, of course, to conserve the environment and reduce our carbon emission, starting with the aircrafts we fly. We fly modern and new aircraft, 787s, which are called Dreamliners, is what flies most of our long-haul destinations. And that also comes with efficient engines, which also are fuel efficient, so lowers emission. Other things that we are doing is, for example, we started off a very exciting initiative where we are converting waste plastic into diesel that we use for our ground operations equipment at the airport. So we clean the environment, so the waste plastic, but then at the end of the day, we are also using, we are converting that into diesel, which also lowers our operational cost and make us economically sustainable. Other things we are doing is, of course, we are also involved in tree planting. We even got a target of about, I think, 4 million trees in a year that we need to plant. And we do partner, and we've started this initiative. Within Kenya Airways, we've gone, we don't allow plastic. So within our environment, and also we've gone paperless. So we're doing things to make sure that we're also supporting the environmental agenda. And a big one, which, of course, is always talked about when you look at airlines is around sustainable aviation fuel. We were the first airline, African airline, last year to fly with SAF, what is called SAF. So very proud of that milestone. We are working with stakeholders, working with government to have this roadmap that will ensure, as we move forward, SAF is available and at an optimal cost. Because the challenge today with SAF is availability when it comes to production, and especially in Africa. But it's also almost seven times more expensive than the jet fuel that we use today. So, but we are working with different stakeholders to make sure that is available. In fact, in a few weeks, we will be recognized for our efforts. We've been shortlisted by SkyTeam. SkyTeam normally runs a global sustainability event or competition among the alliance airlines. And KQ has been shortlisted as being, you know, the airline that is driving, especially SAF initiatives in Africa. And we hope to win that award because that would be great recognition.
Theme: Kenya Airways' success in achieving profitability and recognition, while prioritizing sustainability and expansion in emerging markets
Kenya Airways, one of Africa's leading airlines, is achieving significant milestones in the aviation industry. The airline has reported profits for the first time in 11 years, breaking even in 2024 after a long journey towards operational viability. The recognition received by Kenya Airways, such as being named the leading airline in Africa by the World Travelers Awards, is a testament to the company's dedication and success. Julius Thairu, Chief Commercial & Customer Officer at Kenya Airways, highlighted the airline's commitment to transformation and growth. He emphasized the importance of sustainability and profitability in the company's vision, aiming to be a preferred and sustainable aviation group. Thairu detailed the multifaceted approach Kenya Airways is taking towards sustainability, focusing on environmental conservation, economic viability, and social responsibility. The airline operates modern and fuel-efficient aircraft, such as the Dreamliners, to reduce carbon emissions. Additionally, Kenya Airways has launched initiatives to convert waste plastic into diesel for ground operations and has set ambitious tree planting targets. In line with its commitment to diversity and inclusion, the airline has implemented programs to empower women and encourage differently-abled individuals to join the organization. Thairu also discussed the expansion plans of Kenya Airways, with a focus on increasing frequencies to key destinations in Africa and opening new routes internationally. The airline is responding to growing demand for travel, particularly from the emerging middle class in Africa, and the trend of 'Be Leisure' combining travel and leisure activities. By adding routes to destinations like the UK, Thailand, and China, Kenya Airways is facilitating tourism and economic development. The company's efforts in sustainable aviation practices, coupled with its strategic expansion plans, position Kenya Airways as a trailblazer in the industry.
"Our vision is to be a preferred and sustainable aviation group. Sustainability is at the center of our strategy and who we are. We are a viable and profitable organization that gives value to Africa and contributes to the sustainable development and prosperity of Africa."
['Kenya Airways', 'aviation industry', 'sustainability', 'profitability', 'Africa', 'emerging markets', 'travel', 'economic development', 'airlines']