National carrier Kenya Airways has signed an agreement with Africa Export-Import Bank (Afreximbank) for a KES 159.6 billion ($1.9 billion) loan for its fleet expansion program. The airline raised KES 14.488 billion which it intended to use for buying new aircraft to replace its ageing B767 and B737 fleet and embark on a 10 year fleet expansion program.
Kenya Airways has picked Afreximbank to finance the deficit needed for the fleet expansion and maintenance. The Airline has ordered nine Boeing 787-8(Dreamliners) due for delivery beginning 2013. The airline has also ordered one wide body long range Boeing 777-300ER to boost its existing family of long range twin engine Boeing 777-200ER planes which will propel the airline’s growth in the European and Asian markets due to the aircraft’s capacity, range and fuel economy.
The airline has plans to purchase 10 Embraer E190s to use on the African and regional markets. Kenya Airways expects delivery of the first aircraft in August and KQ chief executive Titus Naikuni sayshat the airline will take delivery of a new aircraft every month there after for the next eight months.The financing deal from Afreximbank will be used for pre-delivery payments and aircraft financing.
“With poor railway and road infrastructure in Africa, air transport is what will drive inter-regional trade and tourism in the continent,” said Jean Louis Ekra of Afreximbank at the signing of the agreement with KQ officials.
A Boeing 787-800 costs USD 193.5 million (KES. 16.3 billion) Boeing 777-300ER costs USD 298.3million(KES. 25.06 billion) while and Embraer E190 costs USD47 million(KES. 3.95 billion).
The airline plans to expand its current fleet of 36 planes to 100 by 2016, with about 23 planes due for delivery in beginning August.