Audio By Carbonatix
Kenya Airways plans to double its fleet over the next five years, its chairman said on Monday, as the loss-making carrier combats regional rivals like Ethiopian.
The Kenyan airline, which is 48.9% government-owned and 7.8% by Air France-KLM, restructured $2 billion of debt in 2017 and is opening new routes as it seeks to return to profit.
It had a fleet of 41 airplanes at the end of last year, comprising a mix of wide and narrow body Boeing planes, compared with Ethiopian which operates more than 100 planes.
Kenya Airways, which also operates Bombardier and Embraer planes on its short and medium haul flights, is restructuring its aircraft leasing agreements and its other debts to free up cash for investment in new planes, Chairman Michael Joseph told a shareholder meeting.
“We intend to double the size of the fleet over the next five years if we can find the right financial structure to do this,” Joseph said.
Efforts by the airline to boost its revenue by taking over the running of Nairobi’s Jomo Kenyatta International Airport were thwarted by a parliamentary committee last month.
The cabinet had backed a plan last year to hand over management of the profitable airport, the largest in the country, to Kenya Airways to revitalise its balance sheet and allow it to buy new planes and open new routes.
Kenya Airways wants to emulate rival carriers who operate airports, taking advantage of profitable services such as catering, fuel distribution, cargo and maintenance.
The parliament’s transport committee has instead proposed that the government considers other ways of helping the carrier, including exempting it from paying taxes.
Chief Executive Sebastian Mikosz, who was hired in 2017 to help turn around the airline, said last month he would resign at the end of this year for personal reasons, casting its recovery into doubt.
The chairman however said the airline’s management was intact despite Mikosz’s planned departure, adding he would leave behind a solid team but declining to say when a replacement for Mikosz will be chosen.
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