KENYA AIRWAYS CONFIRMS BOEING COMPENSATION OVER B787 DELAYS
Kenya Airways has now finally confirmed what must have been one of the worst kept secrets in their corporate history, that they did receive compensation ‘in cash and kind’ from Boeing over the near intolerable delays in the delivery of the so called ‘Dreamliner’, which a more outspoken source at the airline termed ‘a nightmare for our development plans’.
The source at KQ would not be drawn into the extent of the overall compensation, which however is thought to be major considering that the first two B787’s were supposed to be joining the KQ fleet late last year and no deliveries are now expected before the end of 2013 while more aircraft, most urgently needed to replace the ageing B767 fleet and up capacity, will only come to Kenya by between 2014 and 2015.
Kenya Airways, according to another source wishing to remain anonymous, did also play Boeing’s soft spot, if not outright paranoia when introducing talks with Airbus over the purchase of A330 models, a viable option for KQ at the time since major shareholder KLM is operating the same aircraft in their fleet and the constant talk by senior KQ personnel at the time must have rattled Boeing more than just a little and making them more receptive to compensation demands, especially as financial losses are estimated to run into the 300 million US Dollar plus range in costly B767 refurbishments, added heavy maintenance cost and higher fuel burn.
Kenya Airways in April this year finally signed 9 firm orders for the B787 with several more options thought to eventually become firm orders too, but not before agreeing on a hefty compensation package from Boeing, at which stage the talks with Airbus, if ever those had truly advances, declared ‘over’.
A regular source at KQ also ruled out the recent firm order for 10 Embraer 190AR and options for a further 10 Embraer 170 and 190 models as ‘retaliation towards Boeing’, insisting that the airline’s choice for the Embraers was dictated by the need to be flexible on domestic, regional and continental routes where the larger Boeing B737-700’s and B737-800’s were ‘too large for viable operations’ and where a smaller and very economical jet was needed. A detailed report about the Embraer purchase by Kenya Airways was filed here a few days ago giving all the details.