Kenya’s national carrier has had a turbulent journey in the past two years, but turnaround strategy Operation Pride aims to put the brakes on losses and accelerate profitability. Daniella Horwitz speaks to Martyn Haines, Kenya Airways technical director, about plans for a more positive future.
Operation Pride was launched more than a year ago to help Kenya Airways (KQ) achieve financial recovery. The most recent cost-cutting deal (in March) was the sale and leaseback of two Boeing 737-700s, arranged by Air Partner. What is the progress on this to date?
In the maintenance division, we have drilled down on our overall cost base and identified areas of improvement. The largest opportunity was identified within component and engine maintenance agreements. This had accumulated over time, driven by the different fleet types KQ has operated in the past. So far, we have managed to engage our key suppliers on maintenance support agreements and agreed on improved terms of cost and value.
We have equally focused on maintenance productivity optimization programs to ensure our fleet utilization requirements are adequately supported. This has focused on reducing lengthy ground times and increasing parts support to drive a reduction in the maintenance check turnaround times.
Third-quarter operating results for 2016 saw the flag carrier operating a smaller fleet more efficiently as part of the recovery plan. Can you share some of the figures?
This has been one of the areas where our productivity improvements yielded results and our technical team offered improved fleet utilization. We ranked second among Embraer operators worldwide in fleet utilization for December. We also increased operating hours on the Boeing 787 amid various emerging industry reliability issues, and we continue to operate with technical dispatch reliability above the world fleet average. The last three months (December 2016-February 2017) have seen us perform at 99.04%, versus the 787 world fleet average of 98.97% over the same period.
What are the most significant changes?
We have managed to secure maintenance contracts on previously non-contracted services, and you will recall we signed agreements with MTU and GE on the CF34 engines for the Embraer E190. We also have the 787 1C check with Etihad Engineering. We are at an advanced stage of finalizing further agreements on other component and maintenance services.
Can you expand on the 787-8 C check agreement with Etihad Airways Engineering? What was the reason for outsourcing?
This is to enable us to focus on our core maintenance fleet (Boeing 737NGs and E190s) as we also develop our people capability through partnerships with established MROs. The heavy maintenance volumes were not adequate to justify a business case internally, especially when compared with the 737NG and E190 fleets. However, we will keep our options open for future checks on this fleet since this agreement only covers 1C checks. The checks commenced in February, and we have since inducted six of seven aircraft planned for this check. The performance has been as per our expectations.
Where does Kenya Airways Technical position itself in the local and international market?
KQ Technical supports various operators in its mini-maintenance hubs in West Africa, and locally we also support a number of operators flying through Nairobi and Mombasa. We are looking at expanding this capability further and increasing the range of heavy maintenance services we offer, with a focus on the E190 and 737NG. Furthermore, we have established 787 expertise in areas such as line maintenance, CAMO [continuing airworthiness management organization], as well as hosting electronic flight bag and associated software management. We hold various workshop approvals and look to really leverage this capability within our region.
What in-house MRO facilities does KQ Technical have, in terms of hangar size, number of staff and capabilities?
KQ possesses well-equipped wheel and brakes workshops, safety equipment workshops and minor-component repair shops. We have two hangars with a capacity to accommodate a widebody aircraft and up to three narrowbody aircraft. Our staff base ranges from 570-600 for both direct and indirect support, trained on all KQ current fleet types (E190, 737, 767, 777 and 787).
What are the key elements of KQ Technical’s maintenance strategy?
Our maintenance strategy is to drive improvement and excellence in maintaining the E190 fleet and harness the benefits of the Embraer service center accreditation we hold. We are also negotiating with other Embraer operators to offer extended maintenance support.
Over time, we have built up enormous experience on the 737NG and also hold European Aviation Safety Agency Part 145 approval. In supporting these fleets, we have embarked on a journey to reduce our supplier base by consolidating services with key providers and seeking cooperation agreements with our main suppliers. We recently have restructured our leadership team in the technical division, which has reduced spans of control to drive accountability for action.
What do you foresee as the next big challenge for your airline MRO staff?
A major issue has been the loss of skilled staff to the Middle Eastern carriers. Although this affects most African operators, we are continuously investing in our people to ensure that we are competitive.
What technologies have you recently invested in to support your MRO teams?
We have fully optimized available aircraft health-monitoring capabilities on the Embraer and Boeing fleets, and we are starting to see improvements in advanced maintenance requirements and alerting. As an established 787 operator in Africa, we have developed effective hosting of e-enabling requirements and management of complex modern software. We also are working with our engine OEMs to optimize the use of analytic capabilities to predict known problems before they happen and detect future failure modes.
How is KQ Technical working to bridge the “skills gap” in the MRO sector?
The gaps we had have been further aggravated by the staff attrition issues we are facing. However, we have invested in our people, and with our partners are running training to up-skill the young talent we are taking on. We have partnered with SRT and SAS, and by offering training programs to staff, we have created a sustainable pipeline to support dynamic maintenance requirements. We aim to develop our MRO footprint in Africa with partnerships and will announce further staff development programs as they mature.
Operation Pride is taking some tough steps to return Kenya Airways to profitability. Credit: Kenya Airways
What are the biggest challenges for African MROs?
The African MRO market has fluctuated in recent years with the economic challenges and downturn in demand reflected in falling revenue for many leading MROs worldwide. But we must have the strength to deliver what is required of our industry in this environment. So in addition to holding appropriate regulatory approvals and capabilities, we see the need for strong relationships with aircraft manufacturers, OEMs and other MROs.
We believe that Nairobi, at the center of the Kenya Airways network, is a strong geographical location and will help us to be a serious player in the commercial MRO market.
As we face the future MRO market in Africa, we will need to solve a number of critical issues, such as: regulatory framework and legislation; changing demands of airlines and other aircraft operators regarding maintenance services; developments in new aircraft types and related components and engines; and a highly competitive environment driven by the forecast for air transport demand over the next decade.
What is your plan for 2017 and beyond?
To start the journey to becoming the MRO of choice in Africa for airlines within Africa and the Middle East.
Kenya Airways Technical
Kenya Airways shareholders: Kenyan government: 29.8%,
KLM: 26.7%, minority shareholders: 43.5%.
Major customers: EgyptAir, Royal Air Maroc, Rwandair, Precision Air and various Kenyan domestic operators.
History: Kenya Airways began operations in February 1977 after the breakup of East African Airways. KQ Technical has always been a department within the airline and was founded at the same time.
Fleet: Kenya Airways has a fleet of 36 active aircraft including: Boeing 737s (4), 737NGs (10), 787s (7) and Embraer E190s (15).
In-house facilities: Two hangars, mechanical and avionics workshops and expansive warehousing capability.
MRO capabilities for third parties: Line and base maintenance on the following fleets:
• 737NG and E190 (EASA/Kenya Civil Aviation Authority).
• 737, 767, 777 and 787 (Kenya Civil Aviation Authority).
KQ Technical also offers numerous overhaul capabilities on wheels and brakes as well as various survival equipment and galley facilities.