Kenyan Wall Street and Uzalendo News report that Kenya Airways is preparing to transfer ownership of two leased Boeing 777-300s currently operated by the carrier. The deal involves Dubai Aerospace Enterprise (DAE) selling these aircraft to Azorra Aviation Holdings. The COMESA Competition Commission has opened an official inquiry under Article 26 to assess whether the move is against competition or public interest.
This is part of KQ’s broader restructuring aimed at improving financial performance and aligning its fleet with ongoing network strategy.
Transaction Details and Financial Implications
According to Uzalendo News, the two Boeing 777-300s are leased and used on long-haul routes across Europe and the Middle East. The proposed ownership transfer could yield savings between KSh 3.3 billion and 3.9 billion, as lease obligations are renegotiated. At least one plane has already been deregistered in Kenya and re-registered with another airline as part of the transition.
Regulatory Scrutiny by COMESA
The COMESA Competition Commission, responsible for enforcing fair competition in its 21-member African bloc, is evaluating whether the transfer diminishes competition or otherwise contravenes public interest. The inquiry was initiated under Article 24 and is being reviewed as per Article 26 of the COMESA Competition Regulations.
Why This Matters for KQ
- Cost Savings: By offloading expensive leased assets, Kenya Airways could reduce maintenance liabilities and improve cash flow.
- Fleet Optimization: Transitioning from wide-body aircraft to leaner or owned fleet aligns with its post-pandemic restructuring strategy.
- Operational Refocus: The airline continues emphasizing cargo growth and regional connectivity, where large wide-body jets are less central.
Kenya Airways’ recovery, under its ‘Project Kifaru’ initiative, has already seen profitability return, improved liquidity, and renewed fleet discipline.
Regional and Industry Implications
- A successful restructuring could reinforce Kenya Airways’ position in East Africa, especially as markets recalibrate post-pandemic.
- The COMESA review signals increasing regulatory oversight of aviation assets in intra-African deals.
- Leasing partners like DAE and Azorra maintain strategic flexibility by rotating aircraft as operators restructure.
What’s Next
- COMESA ruling: Approval, or modifications, expected in coming weeks/months will dictate deal viability.
- KQ operations: Will reallocated capacity affect service on long-haul routes?
Further restructuring: KQ may pursue more lease maneuvers, sale-and-leaseback deals, or fleet downgrades to manage costs.
