Aviation news: Showdown talks between Kenya Airways and Boeing


(eTN) – As previously reported here, the ongoing delays of the delivery of the B787 to Kenya Airways (KQ) has raised the blood pressure in KQ’s corporate headquarters. The new planes, ordered in 2006 and now several years behind schedule, were to be a key element in cost reductions, route and capacity expansion for “The Pride of Africa.” Recent news that delivery to the launch customer ANA may fall further behind has brought on fresh concerns for other customers. In fact, it is understood that the initially agreed delivery date for the first two aircraft was to be before the end of 2010, and according to a source in Nairobi, Boeing has been unable or unwilling to confirm new dates with any degree of certainty so far.

Kenya Airways presently operates a fleet of B767 and B777 wide-bodied aircraft, but the B767 fleet, fully utilized, of course, is aging and was due for replacement by the lighter, larger, and much more economical B787. Media reports over the past weeks suggested that Boeing had not made any concessions to Kenya Airways, unlike with other customers where reportedly significant rebates and bags of “goodies” were agreed, prompting KQ to start talks with Airbus for the potential purchase or lease of several A330-300, to bridge the gap between the eventual delivery of the B787 or else cover their strategic objectives should the airline be compelled to cancel the Dreamliner orders.

A panel of key Kenya Airways personnel has been evaluating the A330 for a while now, and Boeing will be cautious when talks take place next week over the ongoing, and for KQ’s rather expensive delays, how they play their cards. Should they not concede ground to Kenya Airways, possibly by contributing to B767 retrofitting and upgrading and offering rebates for the B787 order, they might find their B787 orders cancelled – as several other customers have already done in the past as a result of the unacceptable delays – and Airbus may be the beneficiary of this development by selling or leasing some of their own wide bodies to KQ.

In the past, Kenya Airways operated several of the A310-300 types but sold them when they were coming up for replacement and switched to Boeing’s B767 while adding several B777 later on. At the time, Kenya Airways was operating an all-Boeing fleet before eventually buying a couple of Saab turboprops for some of their domestic routes. These types of aircraft have since also been expired from the fleet, but purchases and leases of Embraer 170 and 190 aircraft have already moved the airline away from being a purely Boeing operator and made the airline the biggest Embraer operator on the African continent.

KLM/Air France, which hold nearly 25 percent of the shares in KQ, themselves operate a large number of Airbus aircraft, and this may make a big difference in Kenya Airways’ upcoming decision on which way to go.