Kenya Airways (KQ) is looking to save more than Sh209 million from its newly launched thermal diesel and newly acquired Msferi building that is set to house its operations team, helping its efforts return to profitability after years of losses.
The national airline has launched a thermal diesel production facility that will reduce carbon emissions and save costs by using cheap fuel to power its machines.
Thermal diesel is a type of fuel produced from plastic waste by heating it in the absence of oxygen to break it down into different components, which are then refined into diesel for use in stationary engines such as generators.
KQ has also launched a water purification and bottling plant to produce 300ml water bottles to be served on its flights, which will further reduce costs, but it did not specify the quantity.
The two factories, located at KQ’s headquarters at Jomo Kenyatta International Airport (JKIA), will produce two of the essential goods the airline uses in its daily operations, helping to save money that would otherwise be spent on its purchases.
In addition, the airline is also relocating its operations staff, previously spread across JKIA, to a newly renovated building called Msafiri, which it purchased from another airline, saving up to Sh189 million annually in rental and parking costs.
“Kenya Airways is cutting costs. As you know, Kenya Airways is already working on ensuring that it cuts most of its costs as much as it can, and this is one way,” said Principal Transport Minister Mohamed Dagar.
KQ’s thermal diesel plant, operated by Pyro-degree Energy, will produce up to 1,000 liters of diesel per day, about 22 percent of the total daily requirement for all of the airline’s ground equipment.
George Kamal, Chief Operating Officer at KQ, told… Daily chores They agreed with Pyro-grade Energy to sell the fuel it produces at half the market price, saving the carrier about Sh2.3 million per month and up to Sh27.7 million annually.
The water plant will produce up to 15,000 300-milliliter bottles of drinking water per day, enough to meet KQ’s weekly demand of 33,000 bottles for its flights, and the rest will be sold, generating additional revenue for the airline.
He added: “We will sell the surplus to external entities such as hotels.” “We are already in agreement with some hotels, with JKIA and KAA,” Mr Kamal said. Daily chores.
KQ CEO Alan Kilavuka said the water plant itself would “significantly” reduce the company’s operational costs. “Our estimates are that we will reduce our costs by 60 percent of our current water costs,” he said.
KQ this year posted a half-yearly after-tax profit of Sh384 million, its first in more than 11 years, benefiting from a loss of Sh21.7 billion in a similar period last year, largely due to lower expenses.
With the new cost-cutting measures, the company hopes to achieve its first full-year net profit since 2013.