VENTURES AFRICA – Kenya Airways on Monday announced that it has selected Africa Export-Import Bank (Afreximbank) to arrange financing for the purchase of 20 new aircraft.
According to a Reuters report, the Kenyan national carrier would engage credit facilities from Cairo-based Afreximbank for the purchase of 10 Embraer-190s from Brazilian plane maker Embraer, nine Boeing 787-800s (Dreamliners) from Boeing Co. and one Boeing 777-300ER.
In a statement the airlines said that the “financing package consists of a pre-delivery payments (PDPs) facility and an aircraft delivery finance facility.
The company, which raised Sh14.5 billion ($173 million) in a rights issue earlier this month, plans to spend $3.6 billion over the next five years to increase its fleet and routes.
Kenya Airways, which is 26.73 percent owned by AirFrance KLM, said the Embraers would be delivered in the third quarter of this year while delivery of the Dreamliners is scheduled to begin in the first quarter of 2014.
According to chief executive of Kenya Airways, Titus Naikuni “Africa is said to be the next economic growth frontier, it is therefore important to have an efficient transport infrastructure”
Earlier this month, the airline revealed plans to launch a low-cost subsidiary to handle regional flight operations (Jambo Jet) hinged on low fares and fewer comforts and signalling a more cost-effective structure aimed at strengthening the airline’s competitive edge among budget operators in the aviation industry.
Afreximbank was founded in 1993 by African Governments, private and institutional investors as well as non-African financial institutions and private investors; it focuses on promoting intra-African and extra-African trade and finance.