Struggling KQ to sell planes to American firm
By BRIAN NGUGI, @brian_ngugi
National carrier Kenya Airways has announced that it has entered into a sale agreement with US-based airline Omni Air International for two of its Boeing 777-200 ER aircraft.
This follows approval from its board marking the start of implementation of its redundant fleet disposal turnaround strategy.
Kenya Airways announced its intention to sell the planes in November 2014 as it sought to rationalise its fleet as part of its turnaround strategy.
“I am pleased that we have reached this milestone. Although we announced our intention to rationalise our fleet in line with our current position more than a year ago, it has taken a while to find a good home for our B777-200. We are now satisfied with this sale and will make other important announcements on fleet rationalisation soon,” Kenya Airways Group Managing Director and CEO Mbuvi Ngunze said on Wednesday.
Riding on Project Mawingu an ambitious expansion plan headed by its former chief executive Titus Naikuni that included purchase of new aircraft to modernise its fleet, KQ has been pushed into losses in recent years with the airline’s debt standing in excess of Sh130 billion at one point last year.
CUTTINGS COSTS
Late last year, the carrier said sale of redundant aircraft had become part of its turnaround strategy, amid hopes that the move would help it cut costs and improve prospects.
Besides the fleet rationalisation plan, the airline’s broader strategy involves cutting on operational costs, enhancing worker productivity, and improving its pricing to attract new customers in the face of stiff competition from budget carriers.
The airline showed signs of recovery last year with a significant reduction in its operational losses despite recording a loss after tax of Sh11.9 billion for the six months ending September 2015 compared to a net loss of Sh10.5 billion in 2014.
The two old aircraft will leave for their new home in the next two months after Kenya Airways completes their exit preparation, the airline said in its statement. The disposed planes are part of a fleet delivered new from Boeing to Kenya Airways between 2004 and 2007.
