KQ to convert 4 planes into freighters

Kenya Airways plans to convert four passenger jets into cargo planes to support its plunge deeper into the freight and mail business.

The national carrier said on Friday afternoon that it will convert its Boeing B737-300 passenger jets into freighters to ramp up its cargo unit to meet surging cargo transportation demand across Africa and beyond.

KQ’s Chief Operating Officer Mbuvi Ngunze, said in a statement that the converted Boeing 737 -300 freighters was a cost effective means of boosting efficiency and reliability in the firm’s cargo unit and would translate into a significant enhancement of the firm’s revenue stream.

“We are using our own equipment with minimal additional investment making it cost effective; and since we already know the aircraft, minimal additional training is required to operate the aircraft,” Mr Ngunze explained.

This comes at a time when the aviation industry is facing slow growth in passengers forcing airlines to diversify their operations to generate fresh revenue streams.

Kenya Airways is betting on cargo to reduce its reliance on the passengers segment of the business which generates the bulk of its revenues.

Kenya Airways generates about 8 per cent of its revenue from its cargo business. In the year ending March 2012, it carried 62,504 metric tonnes of cargo, earning it Sh8.8billion. This was 35 per cent rise from the Sh6.5 billion in the previous year.

The first two of these aircrafts are expected to undergo freighter modification by Aeronautical Engineers Inc. (AEI) at its authorized conversion center, Boeing Shanghai Aircraft Services, in Shanghai China.

The first aircraft is expected to go out of service by end of October for the conversion which is estimated to take about three months.

“The aircraft is expected back into service as a freighter February next year. Upon its return, the second Boeing 737-300 aircraft will go out of service and is expected back from the conversion center as a freighter in June 2013,” the statement said.

The converted freighters will operate in Eastern, Central, and Southern Africa, plying routes such as Juba, Luanda, Bangui, Douala, Yaoundé, Kigali, Entebbe, Dar-es-Salaam, Kinshasa and Bujumbura amongst others.

“The regional freighter will allow KQ Cargo to capitalize on full cargo potential on routes that are currently served by the single aisle passenger jets that includes the Embraers and Boeing 737 family. The freighter capacity would also accommodate excess baggage overspill complementing trader traffic especially in Central and West Africa,” KQ said.

At the moment, KQ operates a Boeing 747 branded as Safari Connection freighter in partnership with KLM Royal Dutch Airlines and Martin Air, a subsidiary of the Air France KLM Group, from Guangzhou China which has been mainly focused on West Africa bound flows.

“The regional freighters presents value addition through expansion of flows from Far East to other Africa points, a perfect business solution for the in-feed, de-feed capacity mismatch,” he added.

Recent statistics on cargo industry by the International Air Transport Association (IATA) show that the continent continues to outperform its peers with African airlines transporting freight in the region posting a 10.2 per cent increase in demand in August, building on the 2012 positive growth trend.

The report noted that during the first quarter of the year, the revenue earned from cargo leaving Africa was Sh3.8billion ($45.8 million), with inbound revenues totalling Sh28.3billion ($333.7 million).

According to Alan Cassels, Managing Director of DHL Express Equatorial Africa, this positive growth bodes well for business in the region as it translates into economic growth for the continent.

“It is extremely positive that emerging markets such as those in Africa continue to outpace the Western economies and, set against a backdrop of continued global economic uncertainty, job stagnation, a very challenging European environment and a global debt crisis, this shows the continued and increasing importance of Africa,” said Cassels.

DHL says that the growth in both cargo and freight volumes could be linked to the fact that many businesses, both locally and globally, are looking to Africa for expansion and with the new discoveries of gas and oil fields in Southern and Central Africa, coupled with the technology and healthcare boom, there is an expected improvement in regional trade expansion.