A Kenyan airline that once thrived taking tourists on charter flights to popular East African travel destinations has been forced to target clients in other markets to survive, according to a report in HowWeMadeItInAfrica.
When John Buckley started Safarilink Aviation in 2004, it became obvious to him very quickly that the company would do well. After working 15 years in management for the only Kenyan airline that served tourists at the time, Buckley saw an opportunity for a second airline.
“We knew if we survived the first year we’d be OK,” he said in an interview with HowWeMadeItInAfrica. “Many travel agents were quite happy to have an alternative. After three months it was obvious we were doing well and we actually made a profit in the first year, which was unheard off.”
Business grew exponentially. In August 2013, Safarilink moved 13,000 customers. In September 2013, 67 people died in Kenya’s Westgate Shopping Mall terror attack.
There were other attacks and tourism declined sharply. More than 20 Kenyan hotels shut down and 30,000 workers were laid off. Like other tourism-related Kenyan businesses, Safarilink is going through tough times, HowWeMadeItInAfrica reports.
In 2014, the company just broke even and in 2015, Buckley said he expects for the first time to operate at a loss because of the depressed market.
Safarilink employs 98 people and operates 10 aircraft.
“There are a lot of companies teetering on the edge, and banks looking nervously on their loans. Luckily we are not in that position,” he told HowWeMadeItInAfrica.
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Safarilink is now diversifying into non-tourism related routes. In 2014, it launched daily flights to Lodwar, the capital of Turkana County, a remote area in Northern Kenya where oil was discovered in 2012.
And this month, the airline started offering flights to Vipingo Ridge, a 2,500-acre golf development in the Mombasa area that targets wealthy Kenyans. The Vipingo Ridge project includes an 18-hole course, sandy beaches and a game conservancy. The route also targets neighboring residents from Kilifi to Nyali who don’t want the hassle of flying from Mombasa’s Moi International Airport, according to HowWeMadeItInAfrica.
“Looking back we should have probably gone into some more of the non-tourist routes several years ago,” Buckley said. “Tourism was climbing, and as they say ‘If it’s not broken don’t fix it.’ We always knew that we were exposed but it would have been taking our eyes off the core business.”
Safarilink wants to expand to more routes in Kenya, but Buckley said it’s hard to find sustainable routes outside the four large cities of Nairobi, Mombasa, Kisumu and Eldoret.
“There are some routes we know airlines are losing money heavily on because there is not enough traffic to support a sustainable business,” he told HowWeMadeItInAfrica.
So how much does it cost to operate a commercial aircraft in Kenya?
Safarilink’s smallest aircraft, a small Caravan, costs about $1,600 US a week in insurance alone. That’s about $200 a day, whether it’s flying or not. “And I have got 10 planes like that,” Buckley said.