Kenya Airways Sells B777-200ER aircraft

Kenya Airways has entered into a sale agreement with Omni Air International for two of its Boeing 777-200 ER aircraft, following approval from its board.

Omni Air International is a US based airline providing global passenger ACMI, wet lease and charter programs.

In a statement sent to newsrooms, Kenya Airways said a wet lease is one where the lessor (Omni Air International) provides the Aircraft, Complete crew, Maintenance and Insurance (ACMI).

Kenya Airways announced its intention to sell the B777-200 fleet in November 2014 as it sought to rationalise its fleet as part of its turnaround strategy.

The aircrafts were delivered new from Boeing to Kenya Airways between 2004 and 2007. They were operated on its long haul scheduled routes especially to Asia and Europe.

The aircrafts are powered by Rolls Royce Trent 892B engines and are currently configured with 28 business and 294 economy seats.

“I am pleased that we have reached this milestone. Although we announced our intention to rationalise our fleet in line with our current position more than a year ago, it has taken a while to find a good home for our B777-200. We are now satisfied with this sale and will make other important announcements on fleet rationalisation soon­­,” said Kenya Airways Group Managing Director and CEO Mbuvi Ngunze.

The two aircrafts will leave for their new home in the next two months after Kenya Airways completes their exit preparation.

The first one will be transferred by the end of January.

The National carrier has been financially troubled in recent years.

In November 2015, the Senate Committee probing Kenya Airways (KQ) over billions of losses in revenue ordered for an audit into the airline’s financial reports, specifically on its hedging policy, purchase of Dreamliners and projections of growth in revenue and passenger numbers.

The committee wanted to ascertain the validity of the projections that were developed under the famous Project Mawingu that aimed at expanding the airline services.

Speaking when Deputy Auditor General Alex Rugera appeared before it, committee chair and Kisumu Senator Prof Anyang Nyong’o ordered the Auditor General to give a comprehensive audit report.

Nyong’o said they also wanted an audit of KQ’s decision to retrench 500 employees in 2012 and outsource cabin crew thereafter.

In September 2015, the troubled airline received Sh4.2 billion from the government to help normalise operations.

Speaking when he appeared before the Senate Committee on the inquiry of issues facing Kenya Airways, Treasury Cabinet Secretary Henry Rotich said the money would go towards supporting the national carrier, which has not made a profit in three years.

“The government has provided a short term support by way of a shareholder loan of Sh4.224 billion to meet its financial obligations and particularly to pay off critical creditors, including supplies of fuel and other services,” said Rotich.

Rotich stated that the government is in consultation with the other shareholders to offer requisite support based on the capital requirements to support the adopted turnaround plan.

“The government owns 29.8 per cent of the ordinary shares of Kenya Airways Ltd. It is, therefore, the single largest shareholder in the company, followed by KLM with a shareholding of 26.73 per cent. IFC is the next largest shareholder, with about 9 per cent.”

Kenya has estimated the carrier will need a USD 500-600 million bailout but a precise figure will depend on a turnaround plan being prepared by McKinsey and Seabury consultants.

Until its recent problems, the carrier was regarded as a model of successful privatisation after its listing in 1996 turned it into a profitable company.