Kenya Airways, GE ink fuel-saving deal

Kenya Airways (KQ) #ticker:KQ has moved to check on its fuel bill by inking a contract with US firm GE Aviation, a subsidiary of General Electric, which will provide realtime digital data on all the the carrier’s fleet to help improve efficiency.

The move comes at a time when cost of fuel has played a major role in wrecking the listed national airline’s bottom-line.

In a statement, GE Aviation chief digital officer John Mansfield said KQ will now be able to monitor fleet performance, implement and track fuel saving initiatives across its fleet network under the deal.

“Our aim is to help Kenya Airways reduce their multimillion-dollar fuel bill and increase their overall efficiency. The fidelity in our flight analytics, together with the team’s experience from analysing more than 175 million flights, will enable Kenya Airways to better manage operations with data-driven solutions,” he said.

KQ said GE’s flight operations software will be embedded on all its planes from its Boeing 737, 787 series to the Embraer E190 airplanes.

KQ has a fleet of 41 planes as at December 2018 that fly to various destinations across the globe.

Kenya Airways director of operations Paul Njoroge said their partnership with GE Aviation will empower the carrier to optimise its fuel costs thereby helping it improve on its service.

“The partnership with GE Aviation will empower Kenya Airways to optimise its fuel costs and excel in flight operations. GE brings a wealth of knowledge to help the airline fast track efficiencies enabling improvements in operations and customer experience,” he said.

The software provides flight analytics services integrating data sources like flight information, weather, navigation, flight plans and other operational data to provide insights for airlines around fuel use and operations.

The airline’s management has previously said that rising fuel costs present a significant challenge to its recovery.

KQ, as it is known by its international code, spends about 27 percent of its expenditure on fuel alone, according to the firm’s 2018 annual report.

To this end, the company has implemented a fuel hedging policy to mitigate the impact of the global fuel price volatility.

KQ chose to return to fuel hedging last year, coming years after a similar deal contributed to a monumental Sh26 billion loss following the global fall in oil prices.

However, this time the airline’s executives say they project that fuel prices will continue to rise in the foreseeable future.

Under hedging contracts, firms usually undertake to pay the current market prices for fuel throughout the period of the deal, thus protecting an airline in the event of an upward swing. Kenya Airways posted a Sh7.55 billion net loss for year ended December 2018 as higher costs offset a jump in revenue.