Kenya Airways negotiates better revenue share deal with KLM

A Kenya Airways plane taxiing at the Jomo Kenyatta International Airport. PHOTO| COURTESY

National carrier Kenya Airways (KQ) has managed to renegotiate part s of its long-standing joint venture agreement with Dutch carrier KLM.

The move comes as Kenya Airways puts in place measures to increase revenues generated by flights outside Africa.

According to KQ chairman Michael Joseph, the airline has managed to get KLM to adjust the revenue sharing agreement that will see KQ earn more money from flights operated by the two companies.

Mr Joseph said similar negotiations will be made with its other strategic partners to ensure the airline as a competitive commercial advantage.

“An example is our joint venture with KLM, which has undergone a series of iterations in line with our network optimization process. These changes will increase revenue from our European and North American markets,” Mr Joseph said in an opinion piece in the dailies.

The chairman did not however divulge further details of the changes to the JV.

KLM is the second largest shareholder in Kenya Airways with a 26.73 percent stake.

In February Kenya Airways sought regulatory approvals to negotiate ticket pricing with Precision Air.

KQ owns a 41.23 percent stake in the Tanzanian carrier.

Kenya Airways signed the joint venture deal with KLM in 1996 and has been a thorny subject with observers holding that it remained skewed in favor of KLM.

Mr Joseph however ruled out terminating the deal arguing it was better to make changes to the deal.

The deal allows the two airlines to sell tickets on each other’s planes, with KQ using the Dutch carrier to access routes that are not its roster.

The chairman said efforts to turnaround the airline’s commercial plans are bearing fruit as KQ maintains lean fleet and route mix.

“Kenya Airways flew 3.4 million passengers, the highest number in its last four decades of existence. We achieved this despite tight fleet capacity arising from the lease and sale of some aircrafts as part of ongoing measures to manage costs,” he said.

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