Kenya government bails out KQ to rescue two Boeings

Nairobi-Two new loans provided to Kenya Airways could help Kenya’s national carrier complete the financing needed to take delivery of two Boeing 787-8 aircraft now in storage in Everett, Washington, a source familiar with the matter said on Wednesday.
The two Dreamliner aircraft, produced at Boeing’s North Charleston, South Carolina, assembly line earlier this year, were recently flown to the larger Everett site for “short-term storage” while the airline worked out a financing package for the planes, according to a source familiar with the situation.
Kenyan treasury secretary Henry Rotich told a Senate committee on Wednesday that the government had provided a $40m (about Shs145b) loan to the airline and the African Export-Import Bank had approved a $200m (about Shs727b) bridging loan.

Kenya Airways, which is partly owned by Air France-KLM, has reported losses for the past three years due to a slump in tourism after a number of Islamist militant attacks in Kenya.

Boeing said it was working closely with the airline to meet its fleet needs, but declined to discuss any specifics about the two jets in question, the delivery schedule for any aircraft ordered by the airline, or their cost.

“We are committed to helping our customer find the best solution for both the near-term and long-term business requirements of both Kenya Airways and Boeing,” Boeing spokesman Marc Birtel said in a statement.

Birtel said the sequencing and scheduling of aircraft deliveries change for many reasons, including Boeing needs, customer needs or a combination of the two.

The source said Kenya Airways had not cancelled its order and remained a valued customer of Boeing.

Job losses
Top managers at Kenya Airways will likely lose their jobs before Government releases a proposed bailout package, Mr Rotich has said.

“We need to know what caused the loss before having the managers resign,” he said on Tuesday at the Kenyan parliament buildings.

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