NAIROBI; KENYA: Operations at the Jomo Kenyatta International Airport may be slowly returning to normal, but business entities from across sectors are counting their losses.
Airlines, exporters, hoteliers and tour operators had a busy day yesterday recollecting their lives after the Wednesday early morning inferno that razed the airport’s international arrival terminal.
Kenya Airways, which was operating at just 35 per cent of its capacity yesterday, is among the major casualties. Other than grinding to a halt Wednesday and having to make alternatives for its stranded customers, the airline’s stock at Nairobi Securities Exchange is expected to take a beating. Thursday, the share fell to Sh9.45 from Sh9.50 on Wednesday.
Kenya Airports Authority, on Wednesday alone, lost more than Sh22 million, in landing and parking fees that airlines pay for the use of JKIA.
Though the losses are massive, investment analysts say it is still early to attach a figure on the magnitude of the damage.
“It might not be easy to quantify losses at the moment because to do any calculation we need to know the time when the situation will be rectified,” said John Kirimi, executive director Sterling Capital. “We still do not know yet the extent of the damage and in this calculation, time is of essence.”
According to analysts, KQ stock, which has already lost two per cent of its value in the last two weeks, is expected to further trade within the range of Sh9.40 and Sh9.50 from a high of Sh9.65 in late July.
“This is due to the closing down of the airport. Unless it is re-opened fast, it will be a big blow to the economy and KQ,” said Hazel Kuria, a research analyst at Genghis Capital.
Big announcement
Jane Ngige, Kenya Flower Council CEO said some cut flower exporters might incur losses due to cancellation of flights. On Wednesday, the Government had said cargo flights would resume the same day but according to Ngige, this did not happen. She said the industry expected flights to resume later yesterday.
However, a statement from the Transport Cabinet Secretary Michael Kamau said cargo flights had resumed and “are operating on a specific schedule between 10pm and 6am”.
George Mawadri, area commercial manager for East and Central Africa for British Airways, said the carrier had incurred heavy costs in handling customers flying in and out of Nairobi. He added that flights that have so far been cancelled had been booked to capacity and the losses the airline will incur will be considerable.
Middle Eastern carrier Emirates said it would resume its flights Friday.
Fred Kaigua, chief executive Kenya Association of Tour Operators said since the situation was not within the control of passengers or the operators, it was unlikely that hoteliers would penalise them for change of dates or cancellation of bookings, with the principle of force majeure coming into play.
By MACHARIA KAMAU and JAMES ANYANZWA, The Standard