Flying the Flag: The Price for Tax Payers

Most airline management teams have one overarching objective: to maximize profitability and in extension, shareholder value.

This is not always the case for government-owned, national flag carriers, with many existing as a vehicle of connectivity to stimulate trade, tourism, and investment in the country. A dual mandate - balancing commercial goals and connectivity targets - is commonly given to management teams of national flag carriers.

Kenya Airways (KQ) is one such example. Whilst never explicitly stated, it’s dual mandate is implicitly evident, including in its mission & vision statements.

However, there are plentiful of examples of such government-owned airlines with dual mandates that underperform on commercial objectives, and KQ has been no exception. So, what has the price for Kenyan taxpayers been over the past 10-years?

𝗨𝗦$𝟭.𝟱𝟱 𝗯𝗻.

Expressed differently, this translates to:
- A US$37.71 taxpayer bill per passenger carried.
- A US$0.01 taxpayer bill per ASK offered.

The direct, indirect & induced benefits of KQ’s operations to the Kenyan economy are difficult to quantify, providing grounds to justify its existence and value.

As KQ’s slogan - 𝘛𝘩𝘦 𝘗𝘳𝘪𝘥𝘦 𝘰𝘧 𝘈𝘧𝘳𝘪𝘤𝘢 - suggests, pride also plays an important role that explains its existence together with the roughly 110 government-owned flag carriers worldwide. To some tax payers around the world, that flying pride carries a bill of $37.71 per passenger carried.