Nairobi airline to acquire 8 new aircraft for continental flights

Nairobi, Kenya (eTN) – FLY540 Airlines, a low-cost carrier based here in the Kenyan capital city, will acquire eight more ATR aircraft through its parent company, Lonrho, to be used in launching flights across Africa from its Nairobi hub.

This development allows the Kenyan domestic no-frills carrier to effectively compete with intra- regional carriers, especially Kenya Airways and Ethiopian Airlines. FLY540 will launch flights to eight African countries early this year, and the new aircraft will provide the ability for the airline to continue its expansion plans to link African countries with a quality airline.

David Lenigas, Lonrho’s chairman, said Fly540 is developing into pan African airline, flying both East to West and North to Southern Africa. “I am delighted that ATR, as a leading world manufacturer, has become a strategic part of this exciting growth story,” Lenigas said.

Analysts said the move underscores Lonrho’s confidence in African economies and particularly in Kenya, which has been hit by street riots and tribal clashes that saw over 400 people killed following the December 27 General Election, whose presidential results were disputed by the opposition party, ODM.

In a statement, Lonrho said it’s wholly owned subsidiary, Lonrho Air (BVI), has signed an agreement with Avions de Transport Régional, GIE (ATR) to purchase eight of the latest specification, new, ATR 72-500 aircraft, to be used by Fly540.

The delivered price for the eight aircraft, including a comprehensive support and spares package, will be in the region of US$145 million (Kenya Sh9.5 billion) and delivery will be completed on an agreed schedule. Four aircrafts are expected in Nairobi this year, with the other four joining the fleet next year.

The new aircraft will be branded Fly540 and will be configured with 54 seats in economy and 12 in first class.

ATR will assist Lonrho Air (BVI) in obtaining Export Credit cover for the financing of the Aircraft from COFACE and SACE, the respective Export Credit Agencies (ECA) of France and Italy. ECA financing terms are as approved by the Participants to the Revised Sector Understanding on Export Credits for Civil Aircraft which came into force in July 2007.

“ECA support may extend up to 85 percent of the purchase proceeds of the Aircraft. The balance of 15 percent will be payable by Lonrho Air (BVI) in periodic installments, prior to each aircraft delivery,” Lonrho said in the statement.

The ATR 72-500 is the latest development of the reputable ATR 72 model. It draws from the in-service experience of more than 700 ATR aircraft flying worldwide, with a proven average dispatch reliability of more than 99 percent.

Said Lenigas: “We are delighted that we have been able to agree the purchase of eight new aircraft from ATR to expand our existing ATR fleet. The ATR 72-500 provides lower engine and airframe maintenance costs and less fuel costs than any other aircraft in this market, whilst providing state of the art avionics and new aircraft reliability and safety.”

Lonrho’s wholly owned subsidiary, Fly540 Africa, is keen on expanding its aviation network across Africa, to provide much needed international standard services.

The budget carrier has made significant progress having launched its first flight in November 2006, flying to two destinations. It flies from Jomo Kenyatta International Airport in Nairobi, to all major cities in Kenya- Mombasa, Kisumu, Eldoret, Malindi, and Lamu and to the world famous Maasai Mara National Park. It is planning to include flights to Eastern Democratic of Congo and to South Sudan.

Intercontinental air traffic into Kenya has grown rapidly through the last five years with many of the world’s major airlines placing wide-bodied capacity into the region.

A major arrival was Virgin Atlantic, which begun operating daily services into Nairobi’s International hub from June 1, 2007. As with their counterparts, they have identified a robust and varied market potential within Kenya and the wider East African region.

Lonrho Plc operates a rapidly growing a successful business throughout Africa. With more than 20,000 shareholders, the company is listed on the London AIM stock exchange.