Originally Posted by
simons1
Whether KQ is making money is irrelevant. Any losses more likely to be down to mismanagent or corruption. It doesn't mean that paying customers should foot the bill.
As for it being a high cost environment. Really? How? Employees get some of the lowest wages on earth, and the cheap/nasty Chinese built airports like the one in Nairobi are hardly expensive luxury stuff.
Flights in Africa have always been expensive due to lack of competition and inefficient local operators. I presume that is why they have always tried to keep competition from the likes of FastJet at arms length.
Interesting thoughts there. I would think it's pretty important for any airline to try and sell fares that make them money on average.
Some challenges that might impact costs in some jurisdictions in Africa:
- Small markets, low volumes (low disposable incomes, so cannot stimulate demand via lower fares)
- Fuel costs? State monopoly in various markets?
- Difficulty of repatriating funds from various countries
- I assume typically airport fees and charges are high
- Salaries are one thing, but how about labour productivity?
- Security, insurance
- I would also assume local operations - sales, ground handling etc. - in various countries can be quite expensive (also considering low volumes)