In Brief

Kenya Airways explores dropping fleet in cost saving

Kenya Airways is set to drop Embraer and Bombardier aircraft from its fleets as it opts for Boeing planes in a bid to cut training, maintenance and servicing costs. The airline said they are adopting mono fleeting to control costs announcing the exit of two Boeing B737-700 and two Embraer E190 jets.

KQ, which has defaulted on a Kes57.8 billion loan foreign loans guaranteed by the government forcing the taxpayer to foot the bill, is draining the exchequer as the finance costs on its loans surge.

Although the government budgeted to pay Kes12.4 billion in the Supplementary Estimates for the financial year 2022/23, the figure has skipped to Kes16.1 billion on increased interest and principal payments, probably linked to currency dips.

Read also: How big bad borrowers like Kenya Airways continue to bleed lenders

“The board has approved that we move towards Boeing aircraft. This is, however, going to happen progressively and not in one shot because we don’t want to overheat,” said CEO Allan Kilavuka.

The progressive move to mono leasing, which is part of a project known as Project Kifaru, from which KQ expects to rise, is supposed to be complementary with the KQ’s recent restructuring of lease rentals to ultimately cut down cost of lease ownership.

The switch is meant to reduce the operational maintenance and training costs on crew and engineers. It would also enable Kenya Airways to operate sizeable craft with aircraft types that are seen to be too small.

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