Now this is a person who thinks .....Waiter pea huyo tusker mbili !!!!!I geus the big question is that whether those 37 aircraft leases (if KQ only owns 3) are finance leases or operating. If anyone cared to read the financial statements of KQ .... which are publicly available btw, you will notice that the leases are finance leases. How finance leases work is that the lease runs over substantially the entire useful life of the asset. That means that upon expiry of the lease the aircraft will have a very minimal book value if any.
I dont see any difference between owning an asset or holding a finance lease over the asset. Its just a matter of cashflow management.
KQ's problem has never been lack of passengers.. KQ has a load factor of 72% which is better than most airlines in the same range..... Kq's problem were as a result of poorly executed fleet expansion, even though we had good plans in place which means the main cause of KQs financial problems were bad management..So you are saying 4.4 million pax could have been flown last year without passing a 4bn loss to taxpayers..
Likewise air travelers will always be there whether KQ exists or not. Those 4.4m pax would have travelled with other airlines without passing a single cent of loss to taxpayersKQ's problem has never been lack of passengers.. KQ has a load factor of 72% which is better than most airlines in the same range..... Kq's problem were as a result of poorly executed fleet expansion, even though we had good plans in place which means the main cause of KQs financial problems were bad management..
KQ has never suffered any "special" succumstances that ET or other african airlines never faced. Infact they were better off due to their strong brand positioning.Kafrican,kq started incurring heavy losses due to a combination of factors,not necessary bad management,you remember around 2015 when kq first posted a loss of 27 billion ksh,ebola epidamic was ravaging west africa,so kq had to suspend its flights there and remember its one of the most lucrative routes,again kq primarily depends on african routes,another factor is hedging,due to volatility of fuel in the market kq forges a deal with fuel suplliers for a constant price despite fluctuations in the market but again it is in the same year a barrel of oil dipped a record low,this was a blow to kq due to hedging since it had quoted supplies at a higher price.the other thing is competition from middle east carriers which are eating the african market from kq,BUT the biggest blow was project mawingu when the management went into a buying spree of planes without first securing enough routes to fly them(like tz is doing)this plunged kq into infinite debt and this was the genesis of kq loss making.but my point is to those whining that kq owns three planes project mawingu delivered more planes to kq than any other ambitious venture.
Kafrican,kq started incurring heavy losses due to a combination of factors,not necessary bad management,you remember around 2015 when kq first posted a loss of 27 billion ksh,ebola epidamic was ravaging west africa,so kq had to suspend its flights there and remember its one of the most lucrative routes,again kq primarily depends on african routes,another factor is hedging,due to volatility of fuel in the market kq forges a deal with fuel suplliers for a constant price despite fluctuations in the market but again it is in the same year a barrel of oil dipped a record low,this was a blow to kq due to hedging since it had quoted supplies at a higher price.the other thing is competition from middle east carriers which are eating the african market from kq,BUT the biggest blow was project mawingu when the management went into a buying spree of planes without first securing enough routes to fly them(like tz is doing)this plunged kq into infinite debt and this was the genesis of kq loss making.but my point is to those whining that kq owns three planes project mawingu delivered more planes to kq than any other ambitious venture.
Actually KQ had a better chance in beating ET because its publicly listed, it can raise lots of money through rights issues, it can issue corporate bonds, and it had a cash rich partner KLM who also happens to have 80 years experince and technical capacity..ET Never enjoyed such kinds of options in financing or a partner with such depth in airline management..Wewe mkikuyu Akili timamu,ethiopia airlines is a special case my friend.Look, the three most competitive airlines in africa are SAA,KQ and ET,both KQ and SAA are in distress while ET is blossoming,but the million dollar question is ,why is ethiopia airline prosperous while it is in its infancy while its well established counterparts with shouting brands are flying down the cliff,now here is the thing ET is heavily subsidized by its government which owns it anyway,both kq and saa are some sort of private corporations with the government owning some shares so when unforeseen circcumstances like the one i described above come calling ethiopia gavernment interceded accordingly to mitigate the risk,while kq and saa were left to the their own devices.well about atcl without first securing lucrative and profitable routes anything else is useless,there is nothing special about that 'unique strategy' GoT is simply using tax payers money to buy planes for ATCL,wheter those assets('planes) will generate interest remains to be seen but one thing for sure is they will depreciate by value each and every second,if by chance they make loss it will be a huge loss to the tax payers.so stop beating around the bush it is simply what KQ did and we know the rusults,don't we?
Stop finding flimsy excuses for blatant corruption that sunk KQ👇👇👇Mkikuyu Akili-Timamu public listing does not guarantee alternative funds to plunge or mitigate loses,its vulnerable to shocks,shares dip incase of distress,again who the hell will subscribe to a loss making corporate,bonds don't operate that way.. About atcl how much is GoT leasing to ATCl vis a vis cost of buying,bring out the light on the balance
Corruption is not the only thing that sunk KQ, bad management, fuel hedging and megalomania of expanding like uchumi supermarkets purely on debt..Ebola has little or nothing to do with KQ's problems, it affected every airline including international airlines..ATCL has nothing to learn from KQ, their expansion is not based on debt,their financing is unique.Mkikuyu Akili-Timamu stop engaging in a wild goose chase.Boss KQ made a record loss of 27 billion ksh ,the article you posted states that the plunder by the staff was below 1 billion ksh,thats a huge difference.make no mistake am not standing up for corrupt officials,they should rot in jail,am highlighting the bigger picture here
Eliakeem ebola epidamic came and inflicted maximum damage,it was unforseen,it is not like the management was some sought of divine gods with super natural powers to transcend the future,the management was simply dealt a hefty blow by a NATURAL calamity not designed calamity or outcome of poor decesion from the management,these folks were purely helpless,the depletion at the bottom won't write off the loses,damage happened.... Hedging is a smart move but fluctuations at the market favoured the supplier not kq.thats a loss ,thats not poor management,management is not in control of oil price. About the buying spree,couldn't agree more thats why GoT and ATCL should be worried.tried and tested
My question is, Ebola Epidemic affected only KQ, why not ET, Emirates, Turkish or other Airlines?. Most of the time we are told that Kenyans are resilient, can't it apply on KQ?.Eliakeem ebola epidamic came and inflicted maximum damage,it was unforseen,it is not like the management was some sought of divine gods with super natural powers to transcend the future,the management was simply dealt a hefty blow by a NATURAL calamity not designed calamity or outcome of poor decesion from the management,these folks were purely helpless,the depletion at the bottom won't write off the loses,damage happened.... Hedging is a smart move but fluctuations at the market favoured the supplier not kq.thats a loss ,thats not poor management,management is not in control of oil price. About the buying spree,couldn't agree more thats why GoT and ATCL should be worried.tried and tested
Unlike for profit leasing companies that have plundered KQ and normaly have short renewable leasing periods with an aim to recover their capital..GoT spreads the ATCL lease to 30 or more years. This not only gives ATCL headroom to build its route network but also its easy for their cashflow demands.Mkikuyu Akili-Timamu stop sugar coating ATCL futile rescutation with fancy words,its simply an exercise in futility,tried and tested,been there done that.i asked you a simple question,what is the balance of actual purchase of planes by GoT vis a vis cost of leasing to ATCL.that is everything..