KQ, exporters stare at losses amid protests over Adani deal

Kenya Airways planes at Jomo Kenyatta International Airport in Nairobi. [File, Standard]

Passengers using the country's main airports were left stranded following the strike by aviation workers protesting the planned deal to hand over the Jomo Kenyatta International Airport (JKIA) to India’s Adani Airport Holdings.

Firms exporting fresh produce and other time-bound cargo were also staring at huge losses

On Wednesday, planes failed to land and take off, while those enroute to Kenya had to be rerouted to alternative airports in the neighbouring countries.

Carriers experienced major losses as they were forced to cancel flights in and out of JKIA, having to cater for meals, accommodation and inconveniences for some of their customers and crew stranded in Nairobi and other cities that had connecting flights.

The Kenya Aviation Workers Union (Kawu) members are protesting the proposal to hand over JKIA to Adani, arguing the deal has been shrouded in secrecy.

Local exports, particularly fresh produce such as horticulture and meat products, could be hard hit following the cancellation of flights as well as inadequate cargo handling capacity at the airport.

“This will definitely affect our exports of flowers, vegetables, beef and other products. Avocado exports to Dubai could not be airlifted Wednesday because of the strike that resulted in reduced cargo handling capacity at the airport,” said Shippers Council of Eastern Africa Chief Executive Officer Agayo Ogambi. 

“We foresee massive losses especially for exports and which are time bound.”

Passengers could not access information as the public display boards went blank. At some point, travellers said all terminals had been closed, and so were the Immigration and check-in counters. Many who had shown up ready for travel but had not checked into the terminals decided to leave.

Airlines, including national carrier Kenya Airways, cancelled flights in and out of JKIA without giving an indication on when they would resume.

“Kenya Airways would like to alert you that due to the action by some JKIA staff, this has resulted in some delays and possible cancellations of our flights for both departing and arriving passengers,” said KQ in an update to its customers early yesterday. 

The company, with JKIA as its main hub, may have suffered losses running into tens of millions, going by its annual revenues. The carrier reported revenues of Sh178.5 billion over the year to December 2023, which would mean that on average, the carrier has revenues of about Sh487 million per day, much of which is on flights in and out of the airport. Other than revenues lost, KQ, as is the case for other carriers, would need to make arrangements for the stranded customers and crew.

KQ’s subsidiary Jambojet said it had been forced to ground all its planes and advised its customers to reschedule their travel.

“All our flights, scheduled to land and take off from JKIA, are hereby on hold until further notice. We therefore recommend that you hold your journey to the airport until we publish a new schedule,” said the low-cost carrier.

In an update yesterday afternoon, Jambojet said it was able to operate from Terminal 1D and was able to reschedule its flights to different local and regional destinations. The carrier also operates flights to Goma (Democratic Republic of Congo) and Zanzibar.

Rwandair said also cancelled its flights. "All affected passengers will be rebooked on the next available flights. We apologise for any inconvenience caused.”

Also taking a revenue hit is the Kenya Airports Authority (KAA), the state agency that is under the spotlight for the planned concessioning of JKIA to Adani.

According to its annual report, KAA reported an income of Sh17 billion in the year to June 2023, of which Sh12.38 billion was in form aeronautical revenue, which is what airlines pay to land and use its different facilities at airports as well as taxes on passengers. 

JKIA is key for KAA and accounts for more than 80 per cent of the authority’s revenues.

Kawu has been protesting the privately initiated investment proposal, noting that the deal is being done in secrecy and key stakeholders had not been consulted.

The union also noted that the handing over JKIA to the Indian firm wold result in job losses as well as the takeover of jobs by expatriates at the expense of Kenyans.

The government has insisted that no deal has been reached and that the proposal would be subjected to technical, financial and legal reviews alongside requisite due processes in compliance with the PPP Act 2021. This will include public consultation and subject to approvals by the National Treasury, Attorney General and the Cabinet.

Despite the assurances, the government had failed to make public the proposal, which only came to light in July when Kisii Senator Richard Onyonka requested a statement from the Senate's Transport Committee on the nature of the relationship between KAA and Adani.

Other than loss of jobs for Kenyans, there have been concerns that Adani taking over the airport would lead to higher costs for passengers and airlines using JKIA.

In the proposal, Adani noted that KAA has been charging passengers far much lower than other hubs in the region, including Addis Ababa, and in turn losing revenues and noted that doubling the fees could easily secure the airport’s future. It also wants to be given a free hand in determining how much passengers as well as businesses renting space at the airport pay, even as it seeks an 18 per cent return on investment annually.

“The aero charges (at JKIA) are lower than the competitor airports in the region… aero charges at JKIA for departure are almost 50 to 60 per cent lower than ADD (Addis Ababa Bole Airport) for similar routes,” says Adani.