KQ signs leaseback deal for last three 787-8 Dreamliners

Corporate News

KQ CEO (then COO) Mbuvi Ngunze (right) welcomes a Dreamliner jet last June. PHOTO | FILE 

By BDAfrica.com REPORTER

In Summary

• Kenya Airways ordered nine Dreamliners in 2006 as part of the ‘Project Mawingu’ expansion plan and has received six.
• The Boeing planes have an average list price of $225 million (about Sh20 billion) each, but are often available at a discount.
• AWAS will acquire the planes from Boeing and lease them to the Nairobi-based airline for an undisclosed amount.

Kenya Airways has found a way out of a costly deal it had made to buy three 787-8 Dreamliners directly from the manufacturer.

The cash-strapped airline has struck an agreement with leading aircraft leasing firm AWAS who will acquire the planes from Boeing and lease them to the Nairobi-based airline.

Dublin-based AWAS announced Wednesday that it has agreed to a purchase and leaseback transaction for three Dreamliners, the first of which was delivered today.

Dreamliners have an average list price of $225 million (about Sh20 billion) each, but are often available at steep discounts in bulk purchases. Kenya Airways, which is borrowing to pay staff salaries, is, however, in no shape to pay for the new planes.

READ: KQ hires debt expert after Sh10.5bn half-year loss

Kenya Airways ordered nine of the planes in 2006 as part of the bold and now controversial ‘Project Mawingu’ expansion plan and had already taken delivery of the first six.

Group managing director and chief executive Mbuvi Ngunze remarked on the deal with AWAS: “Our airline has been on an aggressive modernization strategy. The new B787-8s have been instrumental in transforming our operations. We thank AWAS who have proven to be a valuable, responsive and flexible business partner.”

READ: KQ now seeks rich partner, ditches Dreamliners

Ray Sisson, President & CEO AWAS commented: “AWAS would like to welcome Kenya Airways as a returning customer and thank them for the trust they have placed in us. This marks a milestone for us, our first of many planned new technology aircraft acquisitions.”

Kenya Airways is a member of the Sky Team Alliance and a leading African airline flying to 52 destinations worldwide, including 42 intra-Africa. It carries over three million passengers annually and has undergone a significant fleet modernisation programme to fly one of the youngest fleets in Africa.

AWAS, a leading aircraft leasing company, owns a portfolio of more than 300 modern aircraft from Airbus and Boeing on lease to over 110 airline customers in 49 countries.