Friday, November 16, 2012

► KENYA: Jetlink Express ceases operations citing South Sudanese forex crunch.

Jetlink ExpressCiting "an inability to access USD2million (KES171million) worth of funds tied up in South Sudan", Kenya's Jetlink Express (J0) has announced that effective today, Friday 16 November 2012, it is suspending operations.

Jetlink's Route Network
Jetlink's Route Network
An ongoing scarcity of foreign currency in South Sudan since January 2012 has seen the airline unable to meet its short term obligations, especially fuel which constitutes 40% of its costs, leading to it suspending its operations.

A statement this evening in Nairobi by the airline’s managing director Captain Elly Alluvale said:
The Board of Directors of Jetlink Express Limited regrets to announce the immediate suspension of all its scheduled flights with effect from l6 November 2012.
This has been necessitated by our inability to access over USS 2.0 million of our air ticket sales in South Sudan. Nearly allot our ticket sales in South Sudan are transacted in local South Sudanese pounds. Despite the worsening scarcity of foreign currency in South Sudan since January 2012, Jetlink has persevered in servicing the Nairobi-Juba route based on the support we have received from the Government of South Sudan and from our Bankers here in Kenya.
We have largely operated on the goodwill of our Bankers who have allowed us access to credit facilities here in Kenya against our deposited sales in South Sudanese pounds held in our accounts in Juba. Unfortunately, our Kenyan Bankers have recently advised us that they will no longer be able to grant us any further accommodation against our increasing deposited sales in South Sudan citing currency and cross -border risk considerations. This has Left us in a situation where we are unable to meet our short term obligations as they fall due and particularly our fuel bill which constitutes close to 40% of our operating costs.
We take this opportunity to sincerely apologize to all our esteemed customers and partners across the region for the inconveniences caused to them by this suspension of our services.

No mention as yet has been made of a possible date for the resumption of services.
In January, a stand off with Sudan over oil-transit fees prompted South Sudan to suspend crude exports through its neighbor - its only viable route until a proposed USD3billion pipeline through Lamu, Kenya is built. The move has cost South Sudan as much as USD2billion in lost oil revenues and has consequently taken a serious toll on the South Sudanese government's coffers.