LONDON – Nairobi-based Kenya Airways has outlined its plans for growth as it aims to restore its profits and become more competitive by doubling its fleet in the next five years.
The Chairman of the Board, Michael Joseph, announced that it would restructure aircraft leasing agreements on its Embraer aircraft to free up cash for investments into new planes.
“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.
Currently, the airline operates a fleet of 12 Boeing 737-300/700/800, three 777-300(ER)s, nine 787-8 Dreamliners, and 15 Embraer ERJ-190s.
African rival, Ethiopian Airlines, operates more than 100 aircraft, double the amount that Kenya Airways is trying to reach.
Attempts at Growth Failing?
In 2017, Kenya Airways was forced to restructure up to $2 billion worth of debt and is now seeking to open new routes and reduce financial losses.
In a parliamentary committee last month, plans for the airline to take over the running of Jomo Kenyatta International Airport were thwarted. This plan would have enabled further revenue, stemming from the country’s most profitable airport.
The airline wants to be able to do the same as other rival carriers, who own the catering, fuel distribution, cargo and maintenance within the airport structure.
The parliament did offer Kenya Airways a boost in return for this rejection. It has proposed that the airline will be exempt from paying taxes in the country, so then profits can be further maximized and costs consolidated.
Still A Long Way to Go With New Problems
Kenya Airways’ recovery has been cast into doubt in more recent years. The current CEO, Sebastian Mikosz, was hired in 2017 to bring the airline back to a profit.
However, it emerged that due to personal reasons, Mikosz would be stepping down, meaning another successor is going to be needed to continue his work.
The Chairman of the Board did express confidence in the management of the airline, stating it was “intact” and that a replacement will be selected, but with no timeframe given.
Whoever is brought in as the brand new CEO will have to continue on Mikosz’s work as a different direction could place the airline back to where it was a few years ago.
At the time of the New York flight’s launch, airline officials said it was a “confidence boost to the economic well-being of the country and a positive signal for increased foreign direct investment.”
As far as the codesharing agreement is concerned, Kenya Airways managed to put Delta’s ‘DL’ code on its flights from Amsterdam, Paris, London, and Accra to Nairobi. With this, the African carrier expanded its offerings and managed to provide customers flying to the United States with what Delta lists as a “one-stop seamless travel experience from the United States.”
Since then, however, the airline has failed to launch new significant routes.
With there being potential for further investment, we could see this being further reflected in the air shows that are to follow, whether that is Paris next week or Farnborough next year.