What really ails KQ?
- Thread starter Othello
- Start date
I agree with the board on that hedging
You know they did the same in '14/15? And why didn't they hedge when the prices were low?
Uncertainties caused by the pandemic. Nobody could forecast when air travel would resume
Did anyone expect the prices to go further down, or to have a lockdown forever? Such a nonsensical reasoning. You can't hedge such a commodity during war.
As of right now, do they really think fighting will go on for years?
I think I can do better market analysis than those fools. I have said it in this forum that oil prices were going to spike.
Right now, the prices can only remain high, then later start falling. I will be in this forum to remind you.
@Othello previous hedges were based on predicting where the price of fuel would be. But in 2021 it involved predicting (1) where the prices of fuel would be and (2) what would be the demand for flying.
So yes they can forecast/estimate that fuel prices would rise/fall later but because of the pandemic, they couldn't forecast when people would start flying.
So in essence what would have happened is airlines buying fuel at cheap price but there's no plane to use the fuel. So all cash is tied to fuel that is not in use yet on the other hand you have suppliers, employees, creditors etc who want to be paid in cash.
Look at this summary of major airlines which reduced their hedges by upto 30% in 2021 onwards because of the pandemic.
So yes they can forecast/estimate that fuel prices would rise/fall later but because of the pandemic, they couldn't forecast when people would start flying.
So in essence what would have happened is airlines buying fuel at cheap price but there's no plane to use the fuel. So all cash is tied to fuel that is not in use yet on the other hand you have suppliers, employees, creditors etc who want to be paid in cash.
Look at this summary of major airlines which reduced their hedges by upto 30% in 2021 onwards because of the pandemic.
The bottom line is, you don't buy when it is on a historical high. They had all that time - 2021- to feb 2022. It is very unwise to hedge a commodity when there is war. Ni hayo tu
mzeiya
Elder Lister
I travel often and as much as I would prefer using KQ, most times the airline is unable to compete on the routes served by its alliance members in terms of quality of service and ticket pricing.
Other times, smaller airlines such as Rwandair and now the more efficient ones such as Ethiopian go to routes that otherwise KQ would serve better such as Victoria Falls and Lilongwe.
Heck, even direct services such as NBO to Mumbai that one would prefer to choose the national carrier now have options though the Middle East with very limited connection periods.
On the other hand, JamboJet is doing well yet it's a subsidiary of the national airline. Why? Because of its service provision being superior to that of other domestic and regional airlines.
As long as the service is under par, KQ is fighting a losing battle and let's not even talk about vested interests as that will create an even dire picture of the situation on the ground.
Machos tu.
Other times, smaller airlines such as Rwandair and now the more efficient ones such as Ethiopian go to routes that otherwise KQ would serve better such as Victoria Falls and Lilongwe.
Heck, even direct services such as NBO to Mumbai that one would prefer to choose the national carrier now have options though the Middle East with very limited connection periods.
On the other hand, JamboJet is doing well yet it's a subsidiary of the national airline. Why? Because of its service provision being superior to that of other domestic and regional airlines.
As long as the service is under par, KQ is fighting a losing battle and let's not even talk about vested interests as that will create an even dire picture of the situation on the ground.
Machos tu.
No way to offer competitive price ka tabia ni hii ya kununua mafuta at $108 when the competitors bought the same at $70
mzeiya
Elder Lister
That's an advantage for Gulf Airlines only. Ethiopia is a landlocked country and so is Rwanda you know.
We have better ground services i.e. Airports, trained personnel, support and ground crew yet they beat us. Why?
Are they more efficient? Could be... considering we have Kenyans working for such neighbouring airlines but the truth is KQ is a giant in slumber which can awaken when the right leadership is in place and we leverage on the advantages that we have.
Nairobi- London KQ has the most competitive price. It's direct and allows one to check in two bags. Shida ni timing. Regarding hedging, even the European airlines are hedging but now about 30%.
Then you cannot compare KQ to Rwandair or Ethiopian which are heavily subsidised by their government