Kenya Airways’ plan to cancel its direct flight to New York, nearly two years of commencing flight operations to the United States might hurt its tourism sector and affect it balance of trade with America.
According to Kenya’s Centre for Strategic and International Studies, total two-way trade between the United States and Kenya was only $1 billion in 2018. Kenya has the opportunity to significantly grow its share of the US market while improving its balance of trade with America.
The flight cancellation directly undermines the ongoing bilateral free trade agreement the two countries are negotiating to grow the volume of value-added exports from Kenya into US markets.
In addition, it hurts Kenya’s $3 billion horticulture industry, which relies on quick delivery of highly perishable horticultural produce. With flights having to pass through Europe or the Gulf, that lowers the industry’s competitiveness.
In relation to the tourism sector, according to the Kenya Tourism Board, the volume of Americans travelling to Kenya grew from about 84,000 in 2015 to over 225,000 in 2018.
The US is the largest source market for foreign tourists to Kenya. This is a market that is only set to grow given the centrality of New York to connecting flights from large markets in Chicago, Atlanta, Los Angeles, Boston, Dallas, Houston and Miami. It can grow even further, possibly hitting the million mark.
The decision will hurt the growth of our tourism industry by forcing American tourists to make long trips to Kenya via Europe, Dubai or regional competitors.
In terms of diplomacy, it will disrupt direct access to two major global diplomatic centres: New York and Nairobi. New York hosts the United Nations headquarters and multiple diplomatic missions. Nairobi also hosts various diplomatic missions, UN Environment (Unep) and UN Habitat.
With Kenya set to assume its place as a non-permanent member of the UN Security Council in January, the decision sends the wrong messages.
What about the diaspora, students and businesspeople from all over Africa, who would have used Nairobi as a hub or final destination? The travellers now have an added burden as they have to deal with the hassle of obtaining Schengen visas to go through Europe and extra travel time to get to the US.
Lastly, regional aviation competitors, such as Ethiopian Airlines and RwandAir, will snap up the landing slots abandoned by Kenya Airways in the ultra-competitive New York aviation market. Rwanda is finalising plans to fly Kigali-New York direct as Ethiopian will be looking to increase its flight frequency in the East Coast to take advantage of Kenya’s departure from the Big Apple.
The decision is a big loss for Kenya and deserves a rethink.