Kenya Airways (KQ) has secured an extension of the validity period for a Sh310 million non-refundable deposit to Boeing, helping the national carrier avoid another hit to its bottom line.
KQ chief executive Allan Kilavuka, on Thursday, confirmed the extension that will last for at least a year.
The move has helped the national carrier avoid a further dent in its books at a time KQ slid into a full-year loss of Sh36.26 billion in the year ended December.
Kenya Airways made the deposit to the US plane maker to buy new crafts and boost its fleet amid stiff competition from continental rivals mainly, Ethiopian Airlines.
“Yes we have agreed to an extension with Boeing,” Mr Kilavuka told Business Daily.
“The extension would be for at least one year to mid-next year. The extension is not limited to new aircraft but for any service or good from Boeing.”
KQ had in its annual report for last year said it risked losing the money given deposits made for plane purchases are not refundable if a carrier fails to make the buy.
The deposit had risen from Sh280 million in 2021, although KQ did not disclose whether the increase was due to additional cash being put in or due to exchange rate movements of the shilling against the dollar.
KQ more than doubled its loss from Sh15.87 billion in the year to December 2021 at the back of skyrocketing fuel prices and debt, further making it hard for the airline to buy new aircraft.
Mr Kilavuka, however, declined to reveal the number of new aircraft that KQ is eyeing and the timelines amid growing losses that have placed the airline in a shaky financial state.
Rivals such as Ethiopian Airlines have been on an ambitious plan to grow their fleet and maintain an edge in Africa’s aviation industry by offering passengers new experiences.
Ethiopian Airlines last year converted existing orders of A350-900 for the A350-1000 model, making it the first African carrier, yet again to own the largest variant of the Airbus A350 models further pulling clear of KQ.
Ethiopian Airlines has the largest fleet in Africa, including Boeing and Bombardier planes and remains keen to further grow the fleet.