KQ Technical Faces Embraer Loss

Kenya Airways has announced plans to move to an all-Boeing fleet and progressively phase out its De Havilland Canada turboprops and Embraer regional jets.

This is part of its strategy to reduce costs and achieve a turnaround by 2024, following years of losses and state bail-outs.

The strategy has its merits, but where will it leave the airline’s technical arm?

KQ Technical offers base maintenance services for most Boeing types as well as the Embraer 190 and 175.

And while its capabilities on Boeing types will remain needed, how will its investment in Embraer services play out?

KQ Technical was the first Embraer Authorised Service Centre (EASC) in Sub-Saharan Africa, with its parent airline having operated Embraer types since 2007.

In 2016, meanwhile, Kenya Airways signed a five-year deal for Germany’s MTU Maintenance to overhaul the Embraers’ General Electric CF34 engines, although it is unclear if that contract was renewed,

When KQ Technical received the Embraer authorization in 2015, management expected it to drive revenue from third-party business as well as serve the parent fleet.

Accordingly, Kenya Airways would do well to sell its aircraft inside Africa, as its 15 E190s account for about half the total fleet of that model on the continent.

Commenting on the airline’s restructuring plans, chief executive Allan Kilavuka said that non-Boeing retirements would occur in stages, rather than as a quick portfolio sale.

He added: “Despite some headwinds with fuel cost increasing year on year by 160%, and the dollar deterioration that impacted our direct operating costs, we are confident that the restructuring initiatives introduced in 2022, the airline is poised for success and will attain its aspiration to turn around by 2024.”