Kenya Airways, which previously sought to form a pan-African airline group with South African Airways, is still keen to explore an MRO partnership with its maintenance subsidiary SAA Technical.
In 2021, Kenya Airways and South African Airways (SAA) detailed plans to co-start a pan-African airline group by 2023. However, post-pandemic restructuring at both carriers stalled the project. “I would say, until the end of 2021, we were in pure survival mode,” Kenya Airways CEO Allan Kilavuka told Aviation Week Network.
Now that Kenya Airways has returned to profitability and its Project Kifaru turnaround plan is 95% complete, Kilavuka sees a strong opportunity to partner with SAA, particularly on maintenance.
“We share information, in terms of support. We want to go one step further and look at their technical [business] because they have a very good technical unit there,” he said. “They have the tools and the personnel to help us really scale up.”
Kenya Airways currently has its own internal maintenance division, where the workload is split roughly 65% for Kenya Airways and 15% for third-party airlines, such as Kenyan cargo carrier Astral Aviation, LAM Mozambique and RwandAir.
Through a partnership with SAA Technical (SAAT), Kilavuka sees potential for Kenya Airways to turn maintenance into “a standalone business unit” and take on additional third-party work. “We have capacity to grow, but for us to grow, we need tools and space and even more personnel. So, if we work collaboratively with South African Airways, we can provide that,” he said. “We're not working with them at the moment.”
He added that diversification is one of Kenya Airways’ key pillars for business sustainability. “There are different pillars, different streams from diversification. Pillar one is growing MRO,” he said.
Turning to SAAT, it appears that the feeling may be mutual. “Look at SAA plus Kenya [Airways], for instance. That collaboration is one of the many that we actually need,” SAA Technical CEO Wellington Nyuswa said during a recent webinar. “The businesses themselves, the executives themselves, may have a viable case, but because of their ownership and the laws that apply in each country, it becomes very difficult.”
However, Nyuswa said SAAT has “spare capacity” and he sees partnerships as the way forward. SAAT lost a substantial amount of work when SAA radically downsized its fleet. “Post-COVID, we started with 60% of our revenue coming from third parties and only 40% coming from the airline,” Nyuswa said. “As SAA builds up, those numbers are shifting, but we still have more than 40% coming from third parties.”
Kilavuka is hoping to resume wider strategic partnership talks with SAA imminently, or roll out a strategic cooperation with another African carrier by 2027.
The Kenyan government also is ultimately looking to dilute its majority stake and bring in an equity partner to provide capitalization for Kenya Airways’ growth. “We need to renew our fleet, refurbish the existing ones, and so on,” Kilavuka said.
Kenya Airways currently operates 13 Embraer E190s, eight Boeing 737-800s and nine 787-8s, as well as a cargo fleet of two 737-300SFs and two 737-800SFs. Over the coming five years, Kenya Airways is planning to add seven narrowbodies and three long-haul aircraft, and replace all 13 E190s on a one-for-one basis with narrowbodies. Beyond three leased 737-800s, which are committed to join the fleet in 2025, types under evaluation include Airbus A320ceos/neos, 737 NGs/MAXs, A350s, 787s, and 777-200s and -300s.
Related Content
