Emirates deepens flower business rivalry with KQ

 

Emirates Airline will intensify the fight for control of the Nairobi—Amsterdam flower business against Kenya Airways with the introduction of two cargo planes on the route. Photo/FILE 

By WANGUI MAINA

In Summary

• The two freighters—a plane that carries only cargo—will  double Emirates weekly cargo capacity to 400 tonnes and increase the number of carriers in the route to four.
• The additional cargo planes are set to trigger a price war on the route that is dominated with transportation of horticulture produce given that about 70 per cent of Kenyan flowers get to the world market through the Amsterdam auctions.

Emirates Airline will intensify the fight for control of the Nairobi—Amsterdam flower business against Kenya Airways with the introduction of two cargo planes on the route.

The two freighters—a plane that carries only cargo—will  double Emirates weekly cargo capacity to 400 tonnes and increase the number of carriers in the route to four.

The additional cargo planes are set to trigger a price war on the route that is dominated with transportation of horticulture produce given that about 70 per cent of Kenyan flowers get to the world market through the Amsterdam auctions.

Kenya Airways has been carrying flowers beneath passenger planes and since last year dedicated a freighter on Nairobi—Amsterdam, which along with the Nairobi-London route accounted for 21.6 per cent of KQ’s Sh98.9 billion sales in the year to March.

We are looking to add two more frequencies to Amsterdam out of Nairobi. We have the rights just finalising,” said Emirates regional vice-president for East Africa, Khalid Bel Jaflah, in an interview with the Business Daily.

Kenya is the biggest cargo market for Emirates in the region and the rising activity of the Middle East carrier will pile pressure on KQ, which has issued alert on price under cutting on the route.

“Perishable traffic remains the mainstay product but was subjected to price dumping over the summer period due to capacity increase by competition,” said KQ’s chief executive Titus Naikuni in the airlines recently released financial report.

In the financial year ending March 2013, KQ saw its cargo tonnage increase by 11.8 per cent to 69,871 with revenues growing by 10.2 per cent to Sh9.7 billion. The national carrier introduced the Safari freighter, a partnership with KLM and Martinair cargo, on the Amsterdam route.

Kenya exported 367, 885 tonnes of horticulture produce in 2012 up from 363, 799 in 2011, but the produce worth dropped  from Sh83.3 billion to Sh81.1 billion last year. 

KQ cargo business declined four per cent in the quarter to June, but Mr Naikuni expects the new freighters it is introducing in the market to help reverse the drop.

Kenya Airways will on Thursday receive its first cargo plane to tap into the growing trade volumes in Africa and strengthen its freight business.

READ: KQ to receive its first cargo plane

The airline is converting four passenger Boeing planes into freighters and received the first revamped cargo carrier in April.

The planes are expected to help the airline capitalise on cargo business on some of the regional routes where it operates the much smaller Embraer jets which have less cargo capacity.

READ: KQ to convert four passenger planes for cargo business