Kenya Airways to continue expanding fleet as it tries to go back into profit

Kenya Airways to take back sub-leased B777s, B787s

Kenya Airways (KQ, Nairobi Jomo Kenyatta ) is planning to take back its two B787-8 s and three B777-300(ER) s, currently sub-leased to each of Oman Air (WY, Muscat ) and Turkish Airlines (TK, Istanbul Atatürk ), as part of its five-year growth plan, Chief Executive Officer (CEO) Sebastian Mikosz has disclosed.

The Kenyan carrier disposed of the five aircraft as part of a 2016 cost-cutting plan aimed at stemming continual losses through capacity cuts and network pruning.

Speaking to Bloomberg this week, Mikosz said the returning widebodies would allow Kenya Airways to boost revenue flows through the launch of as many as 20 new routes in Africa, Europe and Asia over the next five years. Board approval for the new plan will be sought in April. Kenya Airways currently operates a widebody fleet of seven B787-8s alongside two B737-700 s, eight B737-800 s, and fifteen EMB-190 s on flights covering Kenya, as well as Sub-Saharan Africa, China, Thailand, India, the United Arab Emirates (UAE), Saudi Arabia, the Netherlands, France, and the United Kingdom.

The sub-leased B787-8s and B777s will return to Kenya Airways’ service between September this year and December 2019. One of the returning aircraft will be used to operate the new Nairobi Jomo Kenyatta – New York JFK route that will be launched in October, he said.

In addition, the CEO added that talks with South African Airways (SA, Johannesburg O.R. Tambo ) have taken place over possible cooperation in aircraft MRO as well as route joint-ventures.

Despite two years of restructuring, Kenya Airways has yet to register its first profit. For the first nine-months of FY2017/18, it posted a KES6.1 billion shilling (USD60.3 million) loss which it attributed to higher fuel costs and the negative impact of a prolonged electioneering period.

However, average monthly losses have improved declining to KES677 million in 2017 from KES830 million in 2016.

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