The effect of low cost airlines on the Kenyan aviation industry

Abstract

The low cost airlines world over are performing much better in terms of profit and passenger numbers than most mainstream airlines. Between 2006 and 2009 the airline industry in Kenya saw the advent of low cost airlines. This study assessed how the low cost airline model in Kenya has affected the airline industry. . The study was done in three parts: First, interviews with airline companies were used to get data on how the low cost airline model was being used in Kenya. Secondly, questionnaires were distributed to 120consumers to get data on factors that determine the use of low cost airlines by consumers in Kenya and lastly an analysis of secondary data and interview data from airline companies and the Kenya Aviation Authority was used to evaluate the effect of the low cost model on the airline industry in Kenya. The findings from the qualitative assessment gave evidence that low cost carrier model was not being applied comprehensively in Kenya. The findings from the quantitative analysis concluded that the emergence of low cost carrier has influenced passengers to change their travel patterns due to the following factors: better service, ability to take more vacations, ability to save on time and the ability to save on costs. The findings from the quantitative analysis from secondary data concluded that full service airlines in Kenya are impacted by low cost carriers as their fares have stayed constant over the years despite rise in operational costs and has thus caused a decline in yields. The recommendations would be that the low cost carrier model should be fully adapted to get the benefits and see profitability. The airlines, both full service airlines and low cost carrier need to focus on the factors that influence the consumers to change their travel patterns and improve on those factors to attract the Kenyan consumer. Given the impact low cost carriers have had on Kenya Airports Authority in terms of an increase in revenue generation the government should increase airport infrastructure and support low costs carriers to become sustainable. Further research may explore an airline model that can work for Kenya taking to account the different dynamics in the Kenyan market environment. Further research on the low cost airline model should also be done on a larger basis covering the East African region.