Virgin Atlantic’s decision to pull out of the Nairobi–London route has come as a shock to industry analysts and as a blessing to rivals like Kenya Airways who have been looking to increase their stake in that market.

The route is one of Kenya Airways’ most lucrative, making up about 15 per cent of the airline’s total revenue. British Airways is also seeking to increase its revenue from flights on that route.

Virgin Atlantic announced it will exit the route on September 24, citing among other reasons inadequate demand, increasing costs and a challenging economic environment during the past five years both in Kenya and Europe.

“During the past five years, a combination of record fuel prices, higher and higher taxes imposed by the UK government and a poorly timed slot not providing connections from London have made it uneconomical to fly from Nairobi,” said Sir Richard Branson, the company’s president, in a statement.

The exit will also bring to the fore the question of time slots allocated to airlines and particularly those that follow the hub model.

This model involves an airline flying passengers through their hub or main airport. Kenya Airways will for example fly passengers going from Kigali, Rwanda to Amsterdam, Netherlands, through Jomo Kenyatta International airport in Kenya, before flying them to their final destination.

Time slots are given to airlines for all airports collectively on a six-month basis (summer and winter schedules.) Each airline requests for slots then the airport operator and the government make the allocations. Airlines usually retain the times they had operated in during the previous schedule.

“Time slots offer airlines a competitive advantage. If an airline doesn’t get favourable slots, it means it’s likely to keep passengers waiting for a connecting flight, something that may erode its appeal to customers,” said Brenda Kithinji, an analyst at Standard Investment Bank.

In most cases the allocation is based on politics rather than economics.

“Allocation of these slots is skewed towards national carriers, by giving them an advantage and helping them defend their market share,” said Ms Kithinji. However, under the IATA 80/20 rule, an airline that does not use its allocated slot at least 80 per cent of the time risks losing it.

In Britain, Virgin Atlantic has locked horns with British Airways over what it sees as unfair allocation of slots at London’s Heathrow Airport in favour of British Airlines, the country’s national airline.

(Read: British Airways, Virgin Atlantic now charging half of KQ fares)