Towards a reduction of the Kenya Airways fleet
Between May and August 2021, the British firm Steer Group drew up the restructuring plan for Kenya Airways (KQ). Although this new business plan for the Kenyan parastatal remains secret, some of its outlines have leaked to the press.
In concrete terms, the plan is to reduce the 787 Dreamliner fleet to five and the Embraer 190s to 10. The 737s, however, will remain in place. "Nothing has been decided yet," the chairman of the board of the national flagship, Michael Joseph, told The Star.
According to ch-aviation's advanced fleet module, Kenya Airways currently has a fleet of 36 aircraft, including 15 E190s, as well as nine 787-8s (seven active), eight 737-800s, two 737-700s (inactive) and two B737-300s (SF). Of these, nineteen aircraft are leased to Aviation Capital Group, BOC Aviation, Cross Ocean Partners, DAE Capital, Deucalion Aviation, GECAS, Goshawk, Macquarie AirFinance and Nordic Aviation Capital among others.
The idea of a fleet reduction, which is expected to be accompanied by redundancies, is part of the company's restructuring. "Kenya Airways has developed short, medium and long-term strategies to achieve two main objectives. The first is to survive the current depressed market, and the second is to implement strategies that will make the company more sustainable in the long term," CEO Allan Kilavuka said in May 2021. The restructuring of the carrier was one of the conditions of the 255 billion shillings ($2.4 billion) loan granted by the International Monetary Fund (IMF) to the Kenyan government in March 2021.
It should be recalled that Kenya Airways has just had its ninth negative financial year and has seen its nationalisation process halted. Heavily indebted, it is one of the parastatals that recently received an allocation of 26.5 billion shillings ($233.2 million) from the national treasury, as confirmed by supplementary budget estimates tabled in Parliament on 1 February 2022. The Treasury has already allocated Sh53.4 billion ($470 million) in direct budget support to Kenya Airways for the year ending June 2022. The government recently hired New York-based Seabury Consulting to help the company restructure its total debt of more than $1.117 billion by November 2021.
