Business

Sky is the limit for US direct flights

Nairobi-New York daily 15-hour connection seen to give trade, cultural relations major uplift

Kenya’s economy is set to reap big when Nairobi-New York non-stop direct flights commence on October 28 this year.

Trade, Transport and Tourism Cabinet secretaries Adan Mohammed, James Macharia and Najib Balala respectively have termed the flights a game changer in terms of trade benefits.

The US is Kenya’s seventh largest trading partner with overall volume standing at Sh104 billion last year, and also third leading export destination at Sh47.27 billion.

With Kenya enjoying preferential trade benefits under the African Growth and Opportunity Act (AGOA), the direct flights will boost tourism, infrastructure, tea, coffee, textile, apparel, fruits, nuts, flowers among other products.

Macharia expressed optimism on the daily flights adding this would assert Nairobi as the business and tourism hub.

“Last year we achieved Category One status which is not a mean achievement. We are going to invest heavily and remodel terminal B, C, D to increase the passenger capacity from current seven million to 12 million,” said Macharia.

He said it was encouraging to note that the government has factored in the 2018/19 budget funds to construct light commuter rail from JKIA-Syokimau SGR terminus-Nairobi central business district (CBD) to ease traffic.

On his part, Balala said the US was the number one source of foreign tourist arrivals to Kenya in 2016 and last year.

He added that 95,771 tourists from the US visited Kenya in 2017, representing a growth of 16.3 percent compared to the 82,363 arrivals recorded during the same period in 2016.

“With the Nairobi-US direct flight, we are projecting the number of tourists from USA to grow by 20 per cent,” said Balala.

Kenya Airways (KQ) chief executive Sebastian Mikosz said the airline serving Africa, Europe, Middle-East, Indian sub-continent and Asia, the US route completes an essential piece for KQ network, cementing its position as one of the leading African carriers.

“It fits within our strategy to attract corporate and high-end tourism traffic from the world to Kenya and Africa. The Kenya-US direct flight will increase the airline revenue by 10 percent,” he said.

According to the Economic Survey 2018, total export earnings from America continued to exhibit an upward trend.

The sustained growth in total exports to the region is largely attributable to growth in total exports to the US which accounts for more than 80 per cent of total exports to the region.

The main export commodities to the United States are articles of apparel and clothing accessories which constitute more than 60 per cent of total domestic exports to the country.

In 2017, domestic exports of articles of apparels rose by 5.9 per cent to Sh 30.2 billion.

Other commodities that recorded increased earnings from this destination included, coffee (59.5 per cent), edible nuts (42.3 per cent) and tea (eight per cent).

US exports to Kenya include agricultural products, aircraft parts, and machinery and its business investment is primarily in services, information technology, and the tourism industry.

The direct flights according to Trade CS Mohammed being the fastest connection from East Africa to New York, will hasten and quicken transportation of coffee, tea and other products.

The flights will take 15 hours duration eastbound and 14 hours westbound.

“This is a reduction from the current flight time of over 22 hours, including lengthy layovers,” he said.

KNBS says in 2017, Kenya exported 43,469 tonnes of Coffee and 467,033 tonnes of tea in the global market.

According to Horticultural Crop Directorate in 2017, the industry earned Kenya Sh 82.25 billion.

The sector recorded growth in volume and value of cut flowers exported from 133,658 in 2016 and 159, 961 tons in 2017.

With Kenya and US exploring joint strategy aimed at rapidly increasing exports of tea, coffee and horticultural crops, the direct flight is a plus.

Kenya has been unable to maximise on the AGOA window due to the country’s previous inability to meet the export quota demand of at least 45,000 tonnes of coffee.

But the new strategy being implemented aims at creating bilateral ties between American and Kenyan tea and coffee exporters to utilise as the first export window.

The AGOA quota demand has been the issue but this is no longer so because of the Export Process Zones.

US-Kenya trade got a boost last year after the US dropped plans to endorse a trans-pacific trade pact that would have exposed the country’s exports to America to stiff competition.

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