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Kenya low-cost airline still aiming for 2013 launch

Posted 11 April 2013 · Add Comment

Kenya Airways (KNAL), sub-Saharan Africa's third-biggest carrier, will begin operating low-cost carrier JamboJet later this year, according to a report from respected news outlet bloomberg.com.

JamboJet received its first route licences from the Kenya Civil Aviation Authority in September last year and was originally looking to begin operations by the end of 2012. The plan was to eventually operate six domestic and 16 international routes within Africa from Nairobi Jomo Kenyatta International Airport, using a fleet of Boeing 737 aircraft.

However, according to a Blomberg interview with Kenya Airways CEO Titus Naikuni, the carrier abandoned its first business plan after deciding it needed more time. A revised version is now almost ready and will soon be voted on by the board.
 
Blomberg quotes Naikuni as saying: “If the board approves, we see ourselves getting started some time this year.”
 
The new low-cost service will help Kenya Airways compete with FastJet, the project backed by billionaire airline entrepreneur Stelios Haji-Ioannou intended to be the first pan-African budget airline.
 
Kenya Airways said last year it planned to raise $3.6 billion over the next 10 years to fund expansion that included increasing its fleet to 107 aircraft and more than doubling its routes to 115.
 
Bloomberg reports an initial $244 million rights offer last April was under-subscribed. The setback forced the company to cut the plan to five years while it decided on how best to raise the next round of funding. Naikuni said: “This plan is reviewed every year. We are looking at all options that are available to us: bonds, maybe another rights issue.”
 
Kenya Airways currently flies to 59 destinations worldwide, of which 47 are in Africa. It has 38 aircraft, with an order for an additional 31 over the next three years.
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