How is KQ stock reaction to SGR launch

OakWood_Capital

SGR have incredibly low prices for passengers travelling between Nairobi and Mombasa, this will definitely compete with the 10,000/= ticket fee of KQ and its subsidiary Jambo Jet. How will this affect its stock?

princelysid

OakWood_Capital I doubt SGR will have long term significant effects on the stock. KQ doesn't have that strong market locally, and if you look at their subsidiary Jambo jet, not only are they diversifying their routes to add regional ones they still have the advantage of time, a one hour flight still beats a 5 hour train journey.

magnate

For now the SGR is not a threat to KQ. However, if the SGR will in due time add more frequencies on the route, and develop a reputation for on time departures and reliability, then they'll for sure take a significant amount of travelers from KQ.

princelysid

magnate I don't thing so. Consistency and reliability are things that KQ can improve on as well. SGR is a threat to bus companies, not airlines

magnate

What about pricing-considering Kenyan consumers are price sensitive?

princelysid

magnate Of course, but I still think this targets the people who would take the bus rather than those who would take planes. There is a matrix of things you have to consider here, price, convenience(easy of use, time travelling), comfort and prestige. Particularly if you're looking at people who travel via air you can't just look at one aspect of this

Elan

I don't think we are likely to see much effect just yet , given that the category of users who opt for KQ seem to be looking for much more than ticket price.
However, the activities other travel related service providers such as bonfire adventures are likely to cause a dent. currently, there is a holiday package that includes a trip to the coast via the SGR.
More stress sources for KQ may be the approval of direct flights to Mombasa for the Qatar airways and flyDubai