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KQ to seek compensation for late Boeing deliveries

 A Boeing 787 Dreamliner aircraft under construction. The US aviation authorities have halted global deliveries of the model over battery problems. AFP
A Boeing 787 Dreamliner aircraft under construction. The US aviation authorities have halted global deliveries of the model over battery problems. AFP 

Kenya Airways will seek compensation from Boeing for delayed delivery after the aircraft manufacturer suspended global supply of its Dreamliner models following safety concerns.

Boeing is expected to deliver the first of nine Dreamliners to Kenya Airways by March next year, which is already an extension as the plane maker was initially expected to make its inaugural delivery in the last quarter of 2013.

Boeing on Friday made a decision to stop new deliveries of the Dreamliner planes after a battery problem sparked fires and smoke in several flights. The move is expected to hurt its supply pipeline.

Reports in Bloomberg news indicate that Boeing will need to double its production capacity to ten planes per month after it is cleared by the Federal aviation authorities for it to meet the nearly 800 unfulfilled Dreamliner orders since 2011.

“We are still optimistic that the delivery will be on schedule... compensation discussions can only come in once the manufacturer informs us of a delay and Boeing hasn’t communicated any delay to our first delivery,” Kenya Airways said in a statement.

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The airline signed a purchase agreement with the Chicago-based company in 2006 for supply of the nine Dreamliner’s, with an option of buying four more units of the aircraft.

Boeing has, however, delayed in delivering the units and signed a settlement agreement with Kenya Airways in April 2011.

The airline has meanwhile continued to acquire Brazil’s Embraer jets with an eye on the short haul African routes and was targeting the bigger Boeing jets for long haul flights that connect its Nairobi hub to Asia and Europe. On Monday, the carrier announced its sixth delivery of Embraer jets.

Dreamliner’s technical problems, which saw all the models grounded worldwide last week, is costing Boeing hundreds of thousands of dollars per day to compensate airlines for lost passenger traffic or the need to lease other jets to maintain service, according to reports in the New York Times.

Boeing says it will only resume deliveries once US aviation authorities approve a solution to the aircraft’s batteries.

Should the manufacturer be ordered to make significant changes in the lithium ion batteries used in the Dreamliner, Boeing’s production and deliveries will fall behind schedule.

“We will not deliver 787s (Dreamliners) until the FAA approves a means of compliance with their recent airworthiness directive concerning batteries and the approved approach has been implemented,” said Marc Birtel, a Boeing spokesman.

Like other airlines, Kenya Airways has been attracted by Dreamliner’s advantages, such as greater fuel efficiency and more cargo space, achieved by increased use of lighter plastic materials in place of metals.

The 787-8 model picked by Kenya Airways uses 20 per cent less fuel and has the capacity to carry between 210 and 250 passengers on routes ranging from 14,200 kilometres to 15,200 kilometres.

Fuel costs account for more than half of Kenya Airways’ direct operating costs and the airline is keen on cutting its expenses to grow profits. It made a net loss of Sh4.7 billion in the half year ended September.

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