Kenya Airways (Ticker: NSE) is diversifying its business model by entering the bottled water business with the launch of a bottling plant with a capacity to produce approximately 4,500 litres per day.
As part of the strategy to reduce operational cost and cut on the reliance of fossil fuels, the airline also launched a Pyro-Diesel Plant with a production capacity of 700 to 1,000 liters of diesel.With a production capacity of 700 to 1,000 liters of diesel, the Pyro-Diesel Plant will make a tangible impact on our operational costs, reducing fuel expenses and decreasing the environmental footprint of our ground operations.KQ has been making changes, including on operational efficiencies where it transformed its property Msafiri House, near its headquarters into a centralized Operations Control Centre (OCC) for its flight crew, inflight management and fleet management.“These three bold projects align with Project Kifaru, our strategic recovery plan, which prioritizes financial sustainability, customer focus, and environmental responsibility. They also demonstrate the airline’s commitment to reducing its environmental footprint, improving operational efficiency, and contributing to Africa’s prosperity through responsible corporate practices,” Kenya Airways CEO Allan Kilavuka remarked.
“The Water Bottling Plant, with a capacity to produce approximately 4,500 litres per day, reduce Kenya Airways’ reliance on external suppliers and significantly lower water procurement costs while generating additional revenue through potential water sales,” KQ Chief Operating Officer George Kamal added.
Why it MattersKenya Airways has been struggling on its primary business model, as other competitors such as Ethiopia Airlines, regional competitors, and airlines from the Gulf and the rest of the world take over. KQ’s multiple financial constraints, which have been covered with government bailouts and a decision to change some of its extensive debt into equity, mean that any plans to diversify its business model, and cut operational costs, are good news.
But the markets KQ is entering already have many players, and the logistics and realities of selling bottled water are different from running an airline.
