Kenya Airways Talking to Airbus, But Boeing Still on Radar

NAIROBI (Capital Markets in Africa) – Kenya Airways Plc. is in discussions with Airbus SE to acquire an unspecified number of planes from the Toulouse, France-based company, but remains a “happy and loyal customer” of Boeing Co., according to Chief Executive Officer Sebastian Mikosz.

Sub-Saharan Africa’s third-largest carrier, which wants to add 50 airliners to its fleet over the next six years to ward off competition from the rest of Africa and the Middle East, is “seriously thinking” about Airbus’s medium-range A220, Mikosz said in an interview Tuesday in the Rwandan capital, Kigali.

“If the producer offers us a good deal on the pricing and their delivery and training conditions, we will adopt,” he said. The long-haul A380, though, was out of the equation as it “never made a dime for anybody.”

Besides the A220, the industry has “very limited alternatives” for narrow-body aircraft other than Boeing’s 737 Max, which was grounded after two deadly crashes in the last five months.

“We are one of the potential customers for this aircraft,” Mikosz said of the 737 Max. “I’m not losing trust in them. I believe that once the corrections are done, we will have to conduct a very detailed and large communications exercise to explain what was wrong and what was corrected.”

To finance acquisitions, the loss-making airline would consider various alternatives, including swapping or trading-in aircraft or entering into sale-and-lease arrangements, he said.

Kenya Airways hopes to get clarity by the end of the year on its proposal to jointly manage the Jomo Kenyatta International Airport in the capital, Nairobi, with the state-owned Kenya Airports Authority through a 30-year concessionplan, Mikosz said. The venture could increase passenger traffic at the airport by more than half in under five years, according to the proposal.

“What we are advocating is a massive systemic change” in the country’s civil aviation industry, he said. “The growth of the airline is essential as it accounts for 80 percent of the airport’s revenues annually.”

Source: Bloomberg Business News