I dont think I said KQ leased the 767 and 777 from KLM, the fact is they leased and continue to lease several planes from KLM, the 767 and 777 are mainly leased from GECAS. KQ uses 767 planes to fly in Africa (Long Range planes for short distances) which translates to a waste in fuel, hence it was wise to acquire the Embraer planes.
Do you really know how leasing works? If KQ leases a plane to fly the malawi route then like the other day, the flights are stopped, isn't that a loss, doesnt the plane still has to pay for parking fees and the bla bla you stated above? Esp given that they leasing company will expect a check at the end of the month?

Owning is better in the long run, if they decide to ground a plane, the human resources can be terminated and the plane leased or sold to another operator. May be its time you did your homework

VVS Human resources can be terminated or deployed infact, the best way to go is to lease that. Have a company that will supply stewards and hostesses as needed. And KQ did fire them, forget the politics.

Leasing is considerably higher in the longrun esp for bigger companies or companies that foresee growth, the insurance of leased planes is higher and its often passed to the user, leasing fees include mileage covered. In the long run, lease payments are more than 90% the price of the aircraft.

Now on Embrears and cargo, the planes are mainly passenger planes that are meant to fly shortrange and the cargo space is just enough for that, if anything, it would makes business sense if KQ runs cargo and passenger planes as different entities.

Again, 767s are not short-range flights even though they can handle enough cargo, you find that the returns are very minimal, the delivery of 787 should not be an excuse for KQ to fly a 767 to Dar or Malawi infact 787s should not fly shortrange also, the 737s can do that.

will gava wait till this company is completely bankrupt. this could be the next uchumi.
752 management staff.... isn't that too high.
how can a company borrowing 5b to survive be the same company raising 10b last year for aggresive expansion.
if u realise u are in a sinking boat, stop paddling

There is no company here...

@dunkang one more year of an 8billion loss will cause insolvency

@ Mukiri stop dreaming there is nothing to manipulate about KQ, it's horrible in the airline world - Read European Debt crisis. You saw Qantas shed most of it's European routes to Emirates. My only fear is that I had called a bail out FY 14/15 but I would be very scared if it happens this June.

@ Muchr, spend time differentiating between the various aircraft lease types. There is no homework required on our side. A leased plane makes a lot of sense of KQ. Leases especially wet leases which KQ uses are paid on hours the aircraft operates but you also pay for the rest of the operating costs associated with the plane such as parking, crew etc. Obviously if you are working within the realms of scarce resources obviously you want to pay when you have made some money. When acquiring a plane you place an order, put in a deposit, put in place financing etc. the associated costs are opportunity cost if the plane is not delivered on time, facility cost of the undrawn amount etc. Once the plane is in place you still pay the same costs as the leased plane. Obviously it's in real sense cheaper to lease.

Let's go to KQ (do your homework). Embraers are by and large sub optimal planes for KQ's business model and that is why they have to keep juggling 767's and 777's in africa routes. You make a very poor and basic assumption that all travellers within Africa are going on work related business, holiday or 'oshago' to sight see or visit loved ones and so only need a suite case which fits in the belly of an Embraer. You are WRONG, most of KQ travellers within Africa are largely traders shipping in goods from the East. Belly space in the passenger plane is of paramount importance for KQ. No airline runs a scheduled cargo network. Cargo works on volumes, if there are volumes the plane goes. Certainly as a trader you want to arrive with your cargo or latest one day delay else it impacts on your business. Remember on some busy routes KQ is going head to head with other savvy carriers who use belly space to their advantage. Certainly Emirates has dominated KQ on the Asia- Uganda, Asia - lagos, Assia - Accra routes for this simple reason. They do so well that they actually do 'wing to wing' 777's on the lagos route - a 777 carrying passengers and another 777 carrying cargo all landing within minutes of each other. Just how is KQ supposed to pinch market share with an Embraer on this route.

True.

Reading through this thread makes one grateful for Wazua's archives! Thank you guys.
..a good opportunity to deliberately interrogate varying investment analysis.
..I admit.. wazua is a good thing.

Hahahahaha! Genius! *Aje sasa?*

Every year..KQ has reported bad results blame always went to "Prevailing industry and economic woes"...every year..apart from when they reported 4billion loss for half year..only then did management concede a little bit..that operational efficiencies are at play..

Anyway..it's still crap..the lower the price just makes a better comparative price to asset value ratio.

KQ won't collapse.. Hata Kenya Railways with 50billion insolvency haijaanguka yet.

Kenya power.