Kenya Airways (KQ) has negotiated for a productivity-based payment method with its lessors, seeking to evade the fixed cost and cut expenses involved in fleet management. The airline has changed the lease terms on its aircraft fleet, opting for hourly rates in place of fixed costs.
The airline thus expects to save $45 million (Sh4.85 billion) this year, already having saved $3.1 million after terminating a leasing agreement of two Boeing 737-700 from its lessors.
Out of the 36 planes that KQ manages, the airline has leased 19 from different lessors. Fleet ownership cost climbed to KSh28.6 billion in 2020 from KSh25.3 billion in 2019.
However, KQ failed to reach a deal to pay its pilots per trip as it seeks a lower wage bill to weather the global COVID-19 pandemic that has crushed air travel demand.