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{
    "id": 1421215,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1421215/?format=api",
    "text_counter": 100,
    "type": "speech",
    "speaker_name": "Hon. Murkomen",
    "speaker_title": "The Cabinet Secretary for Roads and Transport",
    "speaker": {
        "id": 440,
        "legal_name": "Onesimus Kipchumba Murkomen",
        "slug": "kipchumba-murkomen"
    },
    "content": "Cynicality: The airline industry can be cynical and can be sensitive to economic cycles. During economic downturns, demand for air travel may decline affecting airline profitability. Regulation: Airlines are subject to extensive regulations including safety and security requirements, which can add operational costs. Competition: The airline industry is highly competitive with many players operating in the market. Competition can lead to price wars and reduced profit margins. Operational challenges: Airlines face operational challenges including maintenance, scheduling and workforce management, which can impact costs and profitability. Pricing strategy: Airlines often use dynamic pricing strategy that can affect their profit margins. Prices for air tickets can vary widely based on factors like demand, time of booking and seat class. In summary, while airlines provide essential transportation services, their profit margins are typically lower compared to many other industries. Their profitability is subject to a range of external factors and competitive pressures. Additionally, IATA indicates that the global airline industry is expected to return to profitability in 2024. However, financial performance across regions remains diverse. The industry’s finances are improving in all regions after COVID-19-related deaths, although not all regions are expected to deliver a profit this year. Africa remains a difficult market to operate an airline, with the economic infrastructure and connectivity challenges impacting the industry’s performance. Despite the challenges, there is still robust demand for air travel in the region, which underpins the continued move towards a return to overall industry profitability. Kenya Airways’ (KQ’s) current performance for 2024 projections is predicated on this forecast. KQ targets to return to profitability in this financial as depicted in the table. The table shows the loans acquired by KQ. I am sure hon. Senators can read about loans from the Government of Kenya. You can see what we have been giving KQ, including Kshs10 billion we gave as soon as the Government came to office. I wish to inform the House that KQ was not the only recipient of Government assistance specifically to cope with the negative impact of COVID-19. Various governments in and outside Africa have provided direct support to airlines. They include Senegal, USD128 million relief package for its tourism and air transport sector. Seychelles waived all landing and parking fees from April to December 2020. Cote d’Ivoire waved tourism tax for transit passengers. In addition, other governments that provided physical support to their travel and tourism sectors include Egypt, Ghana, Zambia, and Cameroon. We have given the list. Technically, it is worth noting that KQ has no loan facility from the Export- Import Bank of the United States of America. The US Exim Bank is a guarantor of USD841.6 million to procure six 787-8 aircraft, one 777-300ER range aircraft, and one Genx engine. This is 90 per cent of the total facility of USD924 million provided by Citibank N.A. and JP Morgan Chase Bank N.A."
}