KLM Strengthens Kenya Airways with Rights Issue
KLM Royal Dutch Airlines will consolidate its status as largest shareholder in Kenya Airways with a USD 65 million expansion in the African airline. An increase in shareholder capital means Kenya Airways can now invest a total of USD 250 million in growth.
KLM and Kenya Airways entered into a joint venture in 1995. The partnership was extended to the Amsterdam-Nairobi route in 1997. Africa is an important market for KLM. “KLM is proud of its longstanding partnership and has every faith in Kenya Airways’ expansion plans for the African continent,” said KLM President & CEO Peter Harman, who also holds a seat on the Kenya Airways supervisory board. The announcement of the investment in Nairobi was also attended by the Kenyan president Mwai Kibaki: “This is a huge milestone both for our country and for Kenya Airways. The airline industry is extremely important to the economy of a country. KLM has once again proven the significance it attaches to its partnership with Kenya Airways.” Peter Hartman: “For KLM, this is further consolidation of our position in Africa, where we this week launched a direct service between Amsterdam and Luanda.
The capital will, among other things, be used to purchase new aircraft, such as Boeing 787s. The airline will also purchase Embraer aircraft for shorter distances. The new aircraft are intended to achieve growth and to replace the airline’s less economical Boeing 767s. Kenya Airways will also add new destinations to its network.
With this expansion, Kenya Airways will strengthen the position of Nairobi airport, which will play an even more important role as the key hub on the African continent. Passengers will gain easier access to African destinations owing to the cooperation between KLM and Air France via their hubs Amsterdam Airport Schiphol and Paris Charles de Gaulle.
After KLM, the Kenyan government holds the second-largest share in Kenya Airways. All shareholders have a preferential right to contribute to the rights issue in the form of new shares.
Over the years, KLM has increased its number of destinations on the African continent to 15. Together with Kenya Airways, a total of 43 destinations are served between East Africa and Europe. This week also marks the 65th anniversary of the official launch of KLM’s services to South Africa.
The Angolan capital Luanda is the 71st intercontinental destination to be added to KLM’s route network. In addition, KLM will launch a thrice-weekly service to Lusaka, Zambia, on 15 May.
In addition to passengers, airfreight is important to the partnership between KLM and Kenya Airways. The two airlines are the first in the industry to offer a direct airfreight service between China and Africa. The service links China’s key industrial zone Guangdong with Nairobi, which is the “Gateway to Africa”, with flights to destinations throughout the continent.
Passengers flying with the SkyTeam global airline alliance have the option of using the “Go Africa Pass”. This is a cost-saving and flexible means to fly Kenya Airways throughout Africa. The “Go Africa Pass” is available to business and leisure travellers flying on an intercontinental round-trip ticket with one of the 15 SkyTeam member airlines or on a “Go Round the World” ticket.
KLM Royal Dutch Airlines was founded in 1919, making it the world's oldest airline operating under its original name. In 2004, Air France and KLM merged to form AIR FRANCE KLM. The merger produced the strongest European airline group based on two powerful brands names and hubs —Amsterdam Airport Schiphol and Paris Charles de Gaulle. The two airlines collaborate on three core activities while maintaining their own identities — passenger transport, cargo, transport, and aircraft maintenance.
In the Netherlands, KLM comprises the core of the KLM Group which further includes KLM cityhopper and transavia.com. KLM serves 135 destinations using a modern fleet of 157 aircraft and employs over 33,000 people around the world. KLM is a leader in the airline industry, which offers reliable operations and customer-oriented products resulting from its policy of enthusiasm and sustainable innovation.
KLM is a member of SkyTeam, an airline alliance offering a network of 926 destinations in more than 173 countries. The KLM network connects the Netherlands to every important economic region around the world and, as such, serves as a powerful driver for the Dutch economy.