Naikuni explained.

I recently had occasion to read a very illuminating book on the business of airlines and in particular the rise and rise of Ryanair. The book by Irish Times Finance Correspondent Siobhan Creaton titled “ Ryanair-How a Small Irish Airline Conquered Europe” is a detailed account of the people and events that turned a dream into reality. It is the story of Tony Ryan, his success in plane leasing and his vision of starting an airline. It is the story of Herb Kelleher of Southwest Airlines in America and his low fares model in America. It is the story of Michael O’Leary the current CEO. It is the story of the “no frills” concept and its impact on world travel. Today Ryanair is the biggest low-fares airline carrying 28 million people on 220 routes across 19 countries (2005) . This is the company that perfected the “no frills” model by doing away with First and Business classes, window blinds, reclining seats, Velcro-anchored head rest covers, seat pockets and issuing sick bags on demand while you buy your own refreshments on board. Back at the office, O’Leary banned Post-it stickers and highlighter pens and encouraged staff to steal biros to save money even as charging of mobile phones at work is banned thereby saving 1.4 pence per charge. In case of a flight cancellations and delays, in the earlier days, Ryanair had a policy of no meal or accommodation vouchers. No refunds and did not entertain complaints from dissatisfied customers. They even considered wheelchairs for the disabled a frill until they were forced by the courts to provide them and accept limited liability for delays and cancellations. Of course such measures are the ones that get the traveling world shocked by their audacity and boldness. Behind the scenes, Ryanair’s growth and profitability is largely due to the low cost base in all its operations. The CEO was not averse to cajoling and at times arm-twisting airport owners and operators into signing on Ryanair at ridiculously low charges for passenger taxes and handling charges with the promise of high passenger volumes. The airline started the trend of flying into low traffic provincial airports that would usually be anything from half hour to a couple of hours away from a major city. That is how destinations like Charleroi, Hahn, Lubeck, Brescia, Perpignan, Montpellier, Malmo, Carcassone,, Pisa, Treviso, Beauvais, and some such destinations have become vogue destinations. As I read the book, there was this uncanny similarity between O’Leary and our own turnaround artist, Titus Naikuni. From local press reports and the grapevine, you don’t get surprised that the airline seems to weather all challenges in its wake and despite doomsayers using the post 9/11 realities to predict turbulence for the company, Naikuni and his team have continued conquering the skies of Africa and beyond. Back in the 90’s I fondly recall the excitement tinged with a dose of patriotism generated by the purchase of three Airbus planes. Today the airline seems to be receiving a new Boeing every other month. The partnership with KLM has availed the advantages of shared resources, but that will not explain the poor performance of other local companies both wholly or partially owned by giant multi-nationals, but with low profitability and stagnated growth despite a trans-continental umbilical cord. I believe his person and a deliberate availability of the requisite resources have worked for him and the airline’s shareholders. He has elbowed the traditional travel agent out of the game by encouraging online transactions and lower commissions for agency services, outsourced services like staff transport, gone into the tours business of selling holiday packages and reduced turn-around times. Aircraft only make money when in the air and I think Kenya Airways is doing well in this respect. They are also overbooking their profitable routes like Mombasa and ensuring that each flight has tens of “bumped” passengers while price wars are their way of guarding their turf. Naikuni is as brave and bold as they come and has recently demanded and got government to embark on expanding JKIA with a view to turning our airport into a continental hub. In ten years time he thinks we may even need a new airport all together. His recent suspension of flights to Kisumu forced Kenya Airports Authority to do the required repairs with egg all over their faces. He now believes that Northern Kenya is ripe for scheduled air travel and has lobbied government to consider giving the airline access to military airports in the region even as he blames underdeveloped infrastructure for the low air travel figure that Kenya suffers from. From the story on Ryanair, I learnt that it’s cheaper and convenient to fly than taking a bus, train or ferry for many Europeans. It’s easy to dismiss that as a developed world phenomena, but I recently learnt from an Indian visitor that there are over 20 internal airlines and it costs as low as a thousand rupees (Kshs. 1,600) to fly from Mumbai to Chennai. It’s cheaper than the train and he amused me with tales of farmers straight from the shamba sharing seats with sophisticated business executives. The Indian economy is booming, but I totally understand what Naikuni is saying. People will travel to destinations you have never heard of if the price is right. Competition is also good and I hope KQ would not resort to blocking the entry of competition like the Irish national airline, Aer Lingus, did when faced with Ryanair’s entry. These strategies are similar to what Ryanair and other low fare airlines like easyJet are using to keep ahead of the competition. Tony Ryan sent his young personal assistant to study the Southwest Airlines in America. He learnt the low fare model from the first innovators and ably applied the same to Ryanair. I am sure other airlines have copied the models and practices. I believe the success at KQ may be modeled on the success of airlines like Ryanair and Southwest Airlines. You don’t have to re-invent the wheel and I don’t see any reason why the lessons learnt in airlines cannot be replicated with success in other businesses.