KQ sells two planes in bid to shore up its finances
Friday October 06 2017
A Kenya Airways plane. PHOTO | FILE |
Kenya Airways has sold two Boeing 737-700 airplanes, marking its latest efforts to reduce its fleet in a bid to shore up its financial position.
The sale is disclosed in a September regulatory filing by UK-based Air Partner, which arranged the transaction on behalf of the Nairobi Securities Exchange-listed national carrier.
“Air Partner Remarketing has successfully sold and delivered two B737-700 aircraft and a GE engine for Kenya Airways,” the aviation services firm said in the statement. It was not immediately clear whether KQ, as the airline is known by its international code, leased back the aircraft after selling them.
Air Partner had earlier announced that the national carrier planned to lease the airplanes from the undisclosed buyer. The UK firm did not also disclose how much KQ raised from the sale.
A new B737-700 goes for $82.4 million (Sh8.4 billion), according to a price guide by Chicago-based Boeing which delivered the two airplanes to KQ between 2002 and 2003.
A used General Electric (GE) aircraft engine is expected to fetch hundreds of millions of shillings, with the price of most new ones topping the Ksh1 billion ($9.6m) mark.
READ: KQ to increase Boeing fleet ahead of US venture
Return to profitability
Restructuring its fleet, including selling aircraft and sub-leasing to other airlines has been one of KQ’s focus areas in recent years as it seeks to return to profitability.
The company sub-leased two B787-8 Dreamliners to Oman Air and three B777-300ERs to Turkish Airlines in the year ended March, booking a Ksh2.6 billion ($25.2m) loss in the deals.
The loss represents the deficit between what it is earning on the transactions and its payments to the primary lessors. KQ also returned two leased E170 aircraft to their owners following an agreement to terminate the leases early.
The company said it will also sell one B777-200ER this year, adding that its fleet restructuring is almost complete.
“The coming year will see a more stable fleet … The focus will be on ensuring the cabin product offered to our guests across the fleet is consistent and of a high standard,” the airline said in the report.