JKIA As The Engine For Kenya's Economic Growth

JKIA As The Engine For Kenya’s Economic Growth

Last week a work trip led me to pass through my favorite airport Schiphol in the Netherlands. Coming in on the final descent into Amsterdam, I noted there were at least 4 other flights in the skies above us, leaving a tell tale trail of white jet stream in their wake and I marveled at the remarkable skills of the Dutch air traffic controllers in keeping all these planes safely in their own paths. About 5 kilometres to the west of our descending plane was another plane that was moving at the same speed and altitude as we were. The similarity of movement was certified when the landing gear for our plane was released in perfect synchronicity with the neighbouring plane. That’s when I realized that both planes would be landing at exactly the same time albeit on different runways. I didn’t see the plane again as we descended into heavy fog that clung to the ground rendering visibility next to zero and I assumed that the plane landed without incident.

I became very curious about the size of Schiphol airport thereafter if two planes could land simultaneously and never meet again. It took at least 10 minutes for the plane to trundle along the interconnected network of taxiways to the terminal. Often, the vehicular traffic on the Amsterdam highways ran under the taxiways, confirming the fact that the airport expansion was a continuous evolution in a neighborhood where land was a scarce resource. It bears noting that Amsterdam’s Schiphol is the 14th busiest airport in the world and the 4th busiest in Europe.

But the airport is specifically and strategically operated to connect Netherlands with all the important economic, political and cultural cities in the world. This goal has been a financial success as Schiphol’s aviation operations contribute €26 billion (Kshs 2.7 trillion) to the Dutch GDP, with 500 companies located at the airport employing 65,000 people. The airport is connected to 323 direct destinations, resulting in 52.6 million passengers and 1.5 million tonnes of cargo annually. There are 425,565 take-offs and landings – collectively called air movements annually. This translates to 1,166 daily air movements. Total real estate on the terminal side is 650,000 m2 with 5 runways all of which are on 6,886 acres. On the revenue side, the airport generated €1.4 billion (Kshs 145 billion) in 2013 with a net profit of €227m (Kshs 23.6 billion).

It’s not difficult to see how the operating company – Schiphol Group – manages to generate good revenues through the execution of their business strategy. The business is run as a combination of four main operations: Aviation, Consumer Products & Services, Real Estate and Alliances & Participations. The Aviation business area operates at Amsterdam Airport Schiphol and provides services and facilities to airlines, passengers and handling agents. It generates 57% of the total revenue for the group.
The Consumer Products & Services business area develops and manages the range of products and services available at Amsterdam Airport Schiphol, the key objective of which is to ensure that passengers enjoy a carefree and
comfortable journey. The business area grants concessions for retail and catering outlets, services and entertainment facilities, and operates retail outlets and car parks. It also creates advertising possibilities at Amsterdam Airport Schiphol. This generates 25% of total revenues. Real Estate develops, manages, operates and invests in property at and around Schiphol and other airports and generates 10% of total revenues. From the property under management, 33% are used as offices while 44% are used as industrial units. Alliances & Participations, which generates 8% of total revenues, consists of Schiphol Group’s interests in the regional airports in the Netherlands and its interests in airports abroad.

If you ever have the pleasure of flying into Schiphol airport, you will attest to the fact that it is the gateway to Dutch culture and plays an extremely prominent role in promoting the country as a tourist destination. Apart from the fact that the shops, restaurants, lounges and rest areas are of the highest quality with very friendly and professional staff, the visual layout of the airport is a constant reminder that there is more that lies to the country outside the confines of the terminal buildings. The success of the customer experience at Schiphol means that there are several repeat customers. 67% of the total passenger throughput in Schiphol are from outside the Netherlands.
What does this all mean? Airports can be big business. Kenya’s geographical location in right in the middle of the continent continues to undoubtedly place us, and Kenya Airways in particular, as the principal hub for intra Africa travel. Which is why the success of our national airline is symbiotically related to the success of Nairobi’s Jomo Kenyatta International Airport (JKIA). However, our airport lets us down. But then again, it’s not like we have jaw dropping or awe inspiring stories from the other competing airports such as Ethiopia’s Bole and Johannesburg’s Oliver Tambo. The two have relatively newer facilities, but the (sad, bad and sometimes mad) attitude of their employees and the general perception of being a weary traveller’s pit stop is completely lacking. It is also noteworthy that not a single African airport appears in the top 50 list of busiest airports in the world. Yet, if you look at any global map, Africa sits plum in the centre and should naturally be the centre of global aviation paths. But then pigs would fly and other supernatural stories. It also bears noting that Schiphol Group’s shareholders are: State of the Netherlands 69.8%, Municipality of Amsterdam 20.0%, Aérports de Paris 8.0% and the Municipality of Rotterdam 2.2%. A Central and two Municipal governments own one of the most successful airport businesses in the world.

Politics can be set aside to provide a world class institution, run on world class business principles and delivering a world class experience. With the right management and incentives, JKIA can and should be a key driver of our economic growth engine.