Kenya Airways set to finalise aircraft lease deal with Turkish Airlines

National carrier Kenya Airways is set to complete its aircraft hire deal with Turkish Airlines in the next one week after deregistering and transferring the final Boeing 777-300 to the European airline.

This is after it disposed of two more aircraft through subleasing agreements to Turkish Airlines and Oman Air.

KQ, as the airline is known by its international code, began the transfer of three of its aircraft to the European Airline at the start of May.

Yesterday it announced that it had handed over a second aircraft.

The three planes will be on lease to Turkish Airlines for four to five years.

The flag carrier also said it has completed its three-year sublease transaction with Oman Air after it handed over the second B787-8.

KQ’s chief executive Mbuvi Ngunze said in a statement that while it is sad to see brand new aircraft go to other airlines, the move is in the company’s best interests.

“It is important to understand the context in which we are taking these decisions. We need to close our gap in profitability and rapidly reduce our cost and debt structure,” he said.

Earlier this year, KQ sold two Boeing 777-200 planes to US-based carrier Omni Air International.

The agreements are part of Kenya Airways’ Operation Pride strategy to rationalise its excess capacity through sub-leases and outright sales, while increasing aircraft utilisation.

Through the plane disposal plan, the national carrier expects to save $84 million (Sh8.4 billion) annually.

“These actions will reduce our monthly fleet costs by over $7 million, and improve our liquidity, and is part of our strategy to turn Kenya Airways into profitability in the next 18 to 24 months,” said Mr Ngunze.

Kenya Airways said the time taken to transfer the planes was influenced by the industry’s rigorous regulatory requirements.