It was the year 1958. Frank Sinatra’s “Come Fly With Me” was the best-selling album in the United States, if not, the world! But weirdly enough, the irony was that most people at the time were not able to take up the offer to “glide, starry-eyed” on an aircraft with anybody. A statistic of 80 percent of the country had never once been air bound. Hard to imagine, isn’t it? There was one easy reason for this – an airline ticket was just too expensive thanks to the law. One of the major achievements in airline ticket pricing to the consumers in the past 30 years or so, was giving government the boot from regulating the skies. This in turn led to a collapse in the prices.
As seen in Graph 1, airfares have managed to decline to about 50 percent …show more content…
Sure, there are a couple of numerous airlines which get created, established, start operations then fall out. But there are also others who get created, established, be operational and just before going out of business, they pull out a trump card – a joint venture agreement. Most businesses have the idea of joining forces to strengthen their resources and therefore, continue the legacy intended, but on a different path of sorts. For example, Pioneer Airlines managed to change its name a record 3 more times to date: Pioneer Airlines was created in 1979, later changed to African Express Airways in 1987, then to Equator Airlines in 1990 and finally to African Express Airways again in 1999, only this time it came with the initials A.E.A. (Curmudgeon, 2011). The gradual rise and strengthening of other airlines in key destinations across Africa has been the major blow to airlines in Kenya falling down. Kenya Airways (mostly known as KQ) has been a victim to such for years and yet, it still stands. Lest not forget, it has been fighting tooth and nail to reach tis motto: “The Pride of Africa”. Ethiopian Airlines incline and its acquisition of 48% stake in Air Malawi in 2013 allowed a third base set up in South Africa by the regional airline. The presence of such a dominant force as Ethiopian Airlines ensured a huge threat to KQ’s African …show more content…
This was a huge feat considering the African renaissance was still in gestation at the time. According to facts and figures, Kenya’s gross domestic product (GDP) nearly quintupled. Hence, it would be logical to assume KQ’s profits to have gone past the ceiling right? Actually, according to Hoover (2012), KQ earned less in 2012 than in 1995. History states that it only outperformed its 1995 earnings in only six times between the two periods. Good news again for the consumers, right? How about for the stock holders and all the investors in the airline? A nightmare come true if you ask me (Hoover,
As seen in Graph 1, airfares have managed to decline to about 50 percent …show more content…
Sure, there are a couple of numerous airlines which get created, established, start operations then fall out. But there are also others who get created, established, be operational and just before going out of business, they pull out a trump card – a joint venture agreement. Most businesses have the idea of joining forces to strengthen their resources and therefore, continue the legacy intended, but on a different path of sorts. For example, Pioneer Airlines managed to change its name a record 3 more times to date: Pioneer Airlines was created in 1979, later changed to African Express Airways in 1987, then to Equator Airlines in 1990 and finally to African Express Airways again in 1999, only this time it came with the initials A.E.A. (Curmudgeon, 2011). The gradual rise and strengthening of other airlines in key destinations across Africa has been the major blow to airlines in Kenya falling down. Kenya Airways (mostly known as KQ) has been a victim to such for years and yet, it still stands. Lest not forget, it has been fighting tooth and nail to reach tis motto: “The Pride of Africa”. Ethiopian Airlines incline and its acquisition of 48% stake in Air Malawi in 2013 allowed a third base set up in South Africa by the regional airline. The presence of such a dominant force as Ethiopian Airlines ensured a huge threat to KQ’s African …show more content…
This was a huge feat considering the African renaissance was still in gestation at the time. According to facts and figures, Kenya’s gross domestic product (GDP) nearly quintupled. Hence, it would be logical to assume KQ’s profits to have gone past the ceiling right? Actually, according to Hoover (2012), KQ earned less in 2012 than in 1995. History states that it only outperformed its 1995 earnings in only six times between the two periods. Good news again for the consumers, right? How about for the stock holders and all the investors in the airline? A nightmare come true if you ask me (Hoover,