National carrier Kenya Airways (KQ) is seeking to have an amended lease deal with 12 plane owners in a bid to cut costs.
The new lease deal with 12 lessors will see the carrier change the terms to hourly rates from fixed charges, a deal that the carrier hopes will change its fortunes for the better.
“The negotiations with all the 12 lessors are still ongoing. We are hoping to finalise this by end of July 2022. We are unable to share more details at this point due to contractual obligations,” KQ chief finance officer Hellen Mathuka told a local daily.
The daily reports that one of the 12 lessors is yet to agree to the new terms, which will see KQ stop paying for idle planes.
As of December 2021, KQ had a fleet of 42 aircraft, both leased and owned, including nine Boeing 787 wide-body jets, 10 Boeing 737 narrow-body jets, 15 Embraer regional jets, two Boeing 737 freighters, and six Bombardier Dash 8-400.
KQ had 52 aircraft in 2015 and the fleet dropped to 39 in 2017 before rising to 42 last year.
In the year ended December 2021, KQ narrowed its net loss by 56.58 per cent to Ksh15.8 billion compared to a net loss of Ksh36.2 billion in 2020.
Total revenue in the review period bumped 32.98 per cent to Ksh70.22 billion, partly lifted by alternative sources such as air charter services which jumped 300 percent and helped compensate for income lost because of travel restrictions on some routes.
The struggling airline cut total operating expenses by Ksh2.89 billion, or 3.62 per cent, to Ksh77.02 billion compared with the year before. It also reduced lease rentals for aircraft by Ksh10 billion.
This, combined with the higher revenue, resulted in an operating loss of Ksh6.8 billion, a sharp decline from Ksh27.11 billion the year before.