Africa: Kenya Airways servicing loans for 17 planes, says CS
Kenya Airways owns 20 aircraft, Transport Secretary James Macharia reaffirmed on Monday, dismissing claims made by a Member of Parliament that the national carrier owns only three planes.
The airline is, however, still paying loans it took from foreign banks to buy 17 of the 20 aeroplanes, having fully paid for three.
He said another 20 planes have been leased from other aviation firms, bringing KQ’s fleet to 40.
The struggling airline, whose shares are publicly traded on the Nairobi bourse, had to lease four of its planes to cut maintenance costs amid low demand.
“Of the 40 aeroplanes in its fleet, Kenya Airways has leased three Boeing 777-300ER aeroplanes to Turkish Airlines, and one Boeing 787-8 Dreamliner to Oman Air,” Mr Macharia said in a statement.
The loss-making carrier earns lease rental income from the four high-capacity planes it has leased out.
Seven of the planes whose loans are yet to be paid —six Boeing 787-8 and a Boeing 777-300 — were financed by City Bank, Jp Morgan Chase and African Export-Import (Afrexim) Bank under a credit facility dubbed Tsavo Ltd Structure.
The remainder 10 Embraer 190 were funded by London-headquartered Standard Chartered Bank and Afrexim Bank under a different facility, Samburu Ltd Loan structure, Mr Macharia said without disclosing the outstanding balance and terms.
Kenya Airways is banking on proposed merger with Kenya Airports Authority (KAA), the operator of public airports and airstrips, to help it return to profitability.