Kenya Airways plans fare hike to counter fuel prices

NAIROBI: National flag carrier Kenya Airways on Tuesday announced plans to increase its fare over the next two months to counter the soaring cost of fuel.

Oil prices have surged by around 80 percent in the past year and on Tuesday they jumped to record peaks above 119 dollars, lifted by the tumbling dollar, unrest in Nigeria and OPEC's reluctance to increase output.

Kenya Airways currently spends about 27 billion shillings (275 million euros, 439 million dollars) on fuel with the figure likely to increase as oil prices show no sign of reducing, its chief executive officer Titus Naikuni told reporters.

"Naturally we have to get that money from somewhere. It is unfortunate we have to increase fares," he said.

"It is not possible to recover all the increases from fare because you get to a point where you become uncompetitive."

The fare increases will vary from route to route, he said. The airline is also expected to resume its thrice-weekly flights to France in June. The move comes four months after flights were suspended because of a sharp decline in bookings caused by the post-election violence that nearly crippled the east African nation.

The unrest, which claimed at least 1,500 lives and displaced hundreds of thousands, erupted after Prime Minister Raila Odinga accused President Mwai Kibaki of rigging the December 27 polls.

The tribal fighting, revenge killings and police crackdown, which abated after the creation a power-sharing government this month, affected the tourism sector that is among the key source of Kenya Airways revenue.

The carrier, which now flies 36 routes around the world, is 26-percent owned by KLM Royal Dutch Airlines.