Digital transformation capability and performance of the Airline industry in Kenya

Abstract

The study investigated the impact of digital transformation capabilities on organizational performance in Kenya's aviation industry, with a specific focus on Kenya Airways Limited. Against the backdrop of challenges faced by Kenya Airways, including increased operating costs, decreased load factors, and customer complaints, the research aimed to fill existing gaps in the literature related to the aviation industry in Kenya. The main purpose was to explore the relationship between digital transformation capabilities and organizational performance. The study objectives included establishing the effect of digital maturity assessment, flexibility, digital leadership, and customer experience capabilities on Kenya Airways' performance. Building on prior research gaps identified in studies on the impact of digital transformation in various industries, the study aimed to contribute to the understanding of how digital transformation capabilities can enhance organizational performance in the context of the aviation sector in Kenya. The research was guided by the Balanced Scorecard Theory, Contingency Theory of Management, and Technology Acceptance Model. The significance of the study lay in providing valuable insights for Kenya Airways, the broader aviation industry in Kenya, and the African region. The research adopted an explanatory and cross-sectional research design. The study targeted senior management, business managers, and functional managers within Kenya Airways, with a total population of 74 individuals. A census approach was employed, including all 74 respondents in the sample. Data collection utilized a semi-structured questionnaire. A pilot test involving 7 purposively selected deputy/assistant heads of departments assessed the reliability and validity of the questionnaire. To enhance reliability, Cronbach's Alpha Reliability test was employed, with a threshold of 0.70 considered acceptable. Construct, predictive, and content validity were scrutinized through expert evaluations, literature reviews, and feedback from supervisors. The research was conducted at the offices of Kenya Airways on Airport North Road, Embakasi, Nairobi City County. Data analysis involved descriptive statistics (mean, frequencies, percentages) and inferential statistics (correlation, regression) using SPSS version 26. Assumptions of the multiple regression model were tested through diagnostic tests, including normality, heteroscedasticity, autocorrelation, and multicollinearity assessments. Ethical considerations included obtaining approvals from African Nazarene University and permits from the National Council for Science Technology and Innovation (NACOSTI). Confidentiality and anonymity of participants were ensured, and due credit was given to others' research work. The study highlights strengths in operational efficiency, digital maturity, flexibility, and customer experience, demonstrating the airline's commitment to excellence and strategic adaptation. However, areas for improvement include consistency in service standards, alignment of digital strategies, and further development of digital leadership. Regression analysis shows that digital maturity, flexibility, and customer experience significantly predict organizational performance, suggesting areas for enhancement. Further studies are suggested to track performance trends, explore employee perspectives, analyze customer segmentation, and examine the impact of external factors. Overall, the findings emphasize the importance of continuous improvement to sustain Kenya Airways' competitiveness and reputation in the aviation industry.