Kenya Airways to sell 7 aircraft, one GE engine as part of recovery plan
Kenya Airways (KQ) is selling seven planes and an engine in a multi-billion shilling deal in a bid to reduce its fleet as part of recovery plans.
September 24, 2019: Kenya Airways (KQ) is selling seven planes and an engine in a multi-billion shilling deal in a bid to reduce its fleet as part of recovery plans. The loss-making carrier has hired UK-based Air Partner to guide it in the planned sale of the six B787-8 Dreamliner planes, one B777-300 and a spare General Electric (GE) engine at a time when a shortage of pilots is forcing the airline to cancel flights and trim routes.
KQ will lease back the aircraft after selling them, according to a contract document between the airline and Air Partner, signalling that it does not intend to see the plane sale hurt its routes.
"Kenya Airways has requested Air Partner to conduct a desktop review addressing a series of questions around these sale and leaseback transactions," said the contract document."
By the end of 2018, the Nairobi-bourse listed airline had a fleet of 41 planes comprising of Bombardier and Embraer on its short and medium-haul, and Boeing for long-haul flights. In 2015, KQ had 52 planes and has now been dwarfed by its competitor Ethiopian Airlines which has over 100 planes.
In the first two weeks of August, KQ cancelled 91 flights due to shortage of pilots. According to the 2019 on-time performance, 182 flights were cancelled this year occasioned by shortage of staffers with pilots and other crew failing to turn up for work. An internal memo shows that the cancelled flights cost the ailing airline at least Ksh118 million in the last seven months of 2019, which was used in accommodation costs for affected passengers.
The sale comes eight years after the carrier announced plans to buy nine Dreamliners in 2011, with the first one having been delivered in 2014. A new Dreamliner is estimated to cost at least Ksh21.49 billion while a new GE engine is estimated to cost over Ksh1 billion. A used GE aircraft engine is expected to fetch hundreds of millions of shillings, with the price of most new ones topping the Sh1 billion mark.
KQ is working on a process that will lead to its nationalisation, eyeing future success. Lawmakers voted to re-nationalise it in July.