Two planes currently leased by national flag carrier Kenya Airways (KQ) are set to change owners if a transaction proposed by its lessor, Dubai Aerospace Enterprise (DAE) Capital, is approved by the regional anti-trust regulator.
The Comesa Competition Commission (CCC) has begun an inquiry into the proposal by DAE Capital to sell two of its aircraft in Kenya to US-based Azorra Aviation, which is also already working with KQ as a lessor.
“The primary target assets comprise two aircraft currently leased to lessees located in Kenya,” said the CCC in an inquiry notice published Tuesday.
A spot check on the DAE Capital website shows that it currently has only one lessee in Kenya – the national flag carrier – which has leased several planes from it, including a Boeing 737-800 delivered in February to expand KQ’s fleet.
The transaction is unlikely to affect the lease or its terms, and KQ will continue operating the planes, except that it will now be paying fees to a different lessor.
It is not yet clear which aircraft specifically DAE will be selling to Azorra, but the firm had announced in May that it plans to sell up to 75 planes as part of its plan to reduce the average age of its fleet.
Specifically, DAE announced intentions to sell 50 Embraer E-Jets and 25 unspecified “out-of-production” aircraft, each group going to a different buyer, which had not been disclosed at the time.
Azorra, which also currently has active leases to KQ, is buying the aircraft from DAE as part of its plan to expand its operations in the region, especially in the leasing of regional and narrow-body aircraft.
“The parties further submitted that the acquiring group entered into the proposed transaction to support its goal as a commercial aircraft lessor, providing lease, financing, and asset management solutions with a focus on regional and narrow-body aircraft,” noted the CCC.
CCC is the competition regulator of the Common Market for Eastern and Southern Africa (Comesa) and usually assesses big-ticket merger or asset acquisition transactions involving firms operating in multiple countries in the region.
In addition to the inquiry it just announced, the regulator on Tuesday unconditionally approved the acquisition of seven aircraft leased by AerCap to carriers in Kenya and Egypt to US-based Castlelake Aviation.
The transaction is also likely to impact planes currently leased to KQ, which has several Embraer E190s leased from the Dublin-based lessor AerCap. Disclosures to the regulator revealed that the sale is part of AerCap’s routine divestiture.
About 18 of the 43 planes are currently leased from different lessors from across the globe, including Nordic Aviation Capital, Aviation Capital Group, and BOC Aviation, among others.
