Kenya Airways aims to double fleet over five years on its way to profit
Carrier restructuring its aircraft leasing agreements and its other debts to free up cash for investment in new planes
Nairobi — Kenya Airways plans to double its fleet over the next five years, its chairman said on Monday, as the unprofitable carrier combats regional rivals like Ethiopian Airways.
The Kenyan airline, which is 48.9% government-owned and 7.8% by Air France-KLM, restructured $2bn in 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 2018, 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, chair 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 revenue by taking over the running of Nairobi’s Jomo Kenyatta International Airport were thwarted by a parliamentary committee in May.
The cabinet had backed a plan in 2018 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.
CEO Sebastian Mikosz, who was hired in 2017 to help turn around the airline, said in May he would resign at the end of the year for personal reasons, casting its recovery into doubt.
The chairman said the airline’s management was intact despite Mikosz’s planned departure. He said he would leave behind a solid team, but declining to say when a replacement for Mikosz will be chosen.