Troubled Kenya Airways (KQ) is planning to sell its seven planes and an engine under a multi-billion deal that is expected to narrow the financial burden facing the national carrier.
UK-based Air Partner has been hired to guide KQ in the planned sale of six Boeing 787-8 Dreamliner planes, one Boeing B777-300 and a spare GE engine.
According to contract documents seen by Business Daily, the airline will lease the aircraft after selling them.
“Kenya Airways is conducting a series of sale and leaseback transactions covering 6 x B787-8, B777-300 and GEnx spare engine.
“KQ has requested Air Partner to conduct a desktop review addressing a series of questions around these sale and leaseback transactions,” the report noted.
The planned sale comes 8 years after the carrier purchased nine 787-8 Dreamliner planes with Boeing. The new planes were meant to replace its aging fleet and expand routes and flight frequencies.
This new sale is seen as a strategy to save the ailing firm from mounting debts. In the recent half-year results, the airline’s loss before tax sunk deeper, it more than doubled to reach Sh85.6 million.
The company’s total operating costs went up 15.6% to close at KES 61.5 bn up from Sh53.2 billion reported a year earlier.
Chief Financial Officer Hellen Mathuka said that the launch of new routes and flights pushed the first-half revenue by 2.2 percent.
The firm has also been hit by a shortage of pilots which saw the cancellation of flights.
In the first two weeks of August, the airline suffered 91 flight cancellations. More than70 flights were due to pilot shortages and crew disruptions.
As part of efforts to save the airline, KQ is also working on a process that will lead to its nationalization.
Featured Image Courtesy: The East African Standard