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Economy

KQ woes cut aircraft imports by Sh24 billion

KQ reported a Sh26.2 billion loss for the year ended March compared to Sh25.7 billion a year earlier. PHOTO | FILE
KQ reported a Sh26.2 billion loss for the year ended March compared to Sh25.7 billion a year earlier. PHOTO | FILE 

Kenya cut aircraft imports by Sh24.4 billion in the first five months of the year having purchased only two planes, reflecting the turbulence in the air transport business.

Data from the Kenya National Bureau of Statistics (KNBS) shows that aircraft imports dropped to Sh558.4 million in the year to May, down from Sh25 billion in a similar period last year and Sh25.7 billion in 2014.

Kenya shipped in only two aircraft between January and May, down from seven in the review period of 2015 and five a year earlier, the official data indicates.

The troubled national carrier Kenya Airways (KQ) and government are the main drivers of aircraft import bill given their big-ticket purchases compared to individuals and corporate bodies that buy planes of less than Sh100 million.

Kenyan military and police have in recent years also been keen to upgrade their fleet in the fight against emerging threats like terrorism.

But Kenya Airways financial woes has largely to blame for the shrinking aircraft orders.

The national carrier is battling a financial storm, and has been reducing its fleet, selling land and cutting jobs to recover from losses caused by a slump in tourism and the cost of renewing its fleet.

It reported a Sh26.2 billion loss for the year ended March compared to Sh25.7 billion a year earlier.

KQ last November added to its fleet two B787-8 planes worth Sh22.4 billion each, marking the last of a batch of nine orders from American manufacturer Boeing put in 2006.

The carrier has halted aircraft purchases and is instead leasing and selling some of its planes in cost-cutting and cash raising plan.

This brings to a halt the fleet expansion plan that saw the carrier increase its fleet size by double digits in the years to 2012, and with it falls imports of planes and spare parts.

While the number of registered aircraft in Kenya grew by a third in the past five years to 2014 to 1,268, KQ has accounted for larger share of the planes and parts import bills.

At Sh558.4 million, aircraft rank eleventh on the list of Kenya’s top imports, down from third last year.

Petroleum products import ranks first at Sh69.7 billion, followed by motor vehicles (Sh25.8 billion), palm oil (Sh20.9 billion) and medicines at Sh16.7 billion.

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