Strategic responses by Kenya Airways to the effects of globalization

Abstract

The new global economy of the 21st Century has transformed the economic, political, social, technological and educational landscape in a profound and indelible manner. Globalization has melted national borders, free trade has enhanced economic integration, and the information and communications revolution has made geography and time irrelevant. Technological innovations, free movement of people across nations has increased trade and subsequently increased demand for air travel impacting greatly on aviation business. For the airline business, the dynamic changes in the business environment have become very complex and are threatening their survival. Both opportunities and risks are part of everyday business in commercial aviation. As with any company, Airline companies have sustainability risks; social, environmental, operational, threat, strategic and financial risks that have to deal with. As a result of the changing and dynamic aviation business environment, Kenya airways have experienced some challenges. This study seeks to investigate the strategic responses by Kenya Airways to the effects of globalization. The objectives of the study were to find out the effects of globalization on Kenya airways and how the airline has responded to such effects. A case study targeting Kenya Airways senior management as the respondents was used. 14 out of the targeted 18 managers were interviewed by the researcher. The findings indicate that globalization have had negative and positive impact on Kenya Airways. It has increased competition eating up market shares while diluting yields on some of the airlines‟ network. On a positive note, globalization has melted trade barriers; enabling Kenya airways expand its network to 50 destinations currently. New technologies have also enabled Kenya airways increase its efficiency and saved costs. Kenya airways have responded to the effects of globalization by joining alliances and partnerships with other strategic airlines, adopting new technologies, being compliant with IATA/ICAO/IOSA airline operations standards. This study recommends further research on if the strategies adopted by Kenya airways have been successful.