Kenya Airways Refuses To Suspend Flights Over Ebola

George Bodo in Kenya claims - it will not be good news for shareholders if Kenya Airways is coerced into suspending its flights to West Africa. Kenya Airways’ share price has been ailing for some time now. In fact, the stock is down 23 per cent year-to-date and continues to compare unfavourably to overall market performance (with the NSE All-Share Index having gained 13 per cent year-to-date).


It’s all to do with the airline’s wobbling macro-fundamentals.

Kenya Airways flies to 36 African destinations, out of which 16 are West African cities — accounting for 44 per cent. It operates nearly 44 flights weekly to West Africa out of which Nigeria, Liberia and Sierra Leone — the three Ebola-hit countries — account for about 20 flights per week. Nigeria alone has 11 weekly frequencies; seven and four weekly flights to Lagos and Abuja respectively.

Secondly, it is not clear yet how and when the Ebola outbreak in West Africa will be fully contained hence flights could be grounded for days, weeks or even a few months.

So, by calling on Kenya Airways to suspend nearly half of its high-margin flights someone should, ideally, be ready with some form of compensation. Otherwise, its stock price will continue being more vulnerable in the coming weeks.