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Kenya Airways CEO sees 10 percent revenue bump from direct U.S. flights

Nairobi (Reuters) – Kenya Airways expects its daily direct flights to the United States that it launches for the first time in October to boost annual revenue by 10 percent from 2019, the chief executive said on Thursday.

The carrier, which is 7.8 percent owned by Air France KLM, has started taking bookings for the flights to and from New York that will carry 234 passengers each way on a Boeing 787 Dreamliner plane.

The new long-haul route is part of an effort to revive the airline’s fortunes after it came close to collapse, leading to a $2 billion financial restructuring in November that included a government bailout which shrank Air France KLM’s stake.

“This is going to increase 2019 (revenues) by roughly 10 percent,” Chief Executive Officer Sebastian Mikosz told reporters at an event to launch the new 15-hour route.

U.S.-bound passengers from Kenya must now change planes in Europe or the Gulf on a journey that can take 20 hours or more.

“This is a symbol of the comeback of Kenya Airways,” Chairman Michael Joseph said.

Kenya has long wanted to fly direct to the United States, but Kenyan carriers were only granted U.S. security clearance for the route in February 2017 after a major refurbishment of facilities at the main Nairobi airport.

Kenya has suffered frequent attacks by an Islamist militant group based in neighbouring Somalia in recent years. The attacks hammered Kenya Airways by driving away tourists from the East African nation, which boasts palm-fringed beaches and safaris.

CEO Mikosz said the new route aimed to encourage more business and tourist travel with the United States, which he said was the biggest source of visitors to Kenya.

In the first 10 months of 2017, 95,771 tourists travelled to Kenya from the United States, a figure that has been rising 20 percent in each of the past two years, he said.

Kenya also hosts regional hubs for 48 U.S. or U.S.-based, organizations, such as Google and IBM, he added.

Thursday’s event was held at a five-star hotel to signal the end to recent hard times when gatherings were staged under a tent at the carrier’s training school to save costs.

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The direct flights would create about 150 new jobs at Kenya Airways, said Mikosz, who was hired from LOT Polish airlines last June to help turn around the carrier.

Kenya Airways shares, which have tripled in value since the November restructuring, jumped 5.9 percent to 17.15 shillings ($0.1666) on Thursday.


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