Kenyan aviation firm signs aircraft lease deal with the Southern Star, a South Sudanese Start-up Airline

Posted: September 4, 2011 by PaanLuel Wël Media Ltd. in Junub Sudan


Kenya-based aircraft leasing company, ALS Ltd, has signed a one-year lease agreement with Southern Star, a new start-up airline based in the newly created South Sudan state.

The aircraft, a 37-seater Dehavilland Dash 8, is valued at $4.5 million (Sh400 million) and will cost the South Sudanese airline approximately $200,000 (Sh18 million) a month in leasing fees.

"This is expected to be a long-term partnership with the new start-up airline that is vying for national carrier status for the new republic of South Sudan," said ALS chief executive officer Cornwell Muleya during the signing ceremony held in the South Sudan capital, Juba, when it took delivery of the aircraft.

Southern Star will use the plane to ply domestic routes in the first phase of the lease.

The second phase will incorporate larger aircraft from ALS such as the Embraer 145, a 50-seater jet, which can do international flights, under a long-term lease signed with Southern Star.

Southern Star, a new airline, is vying for national carrier status for the new republic of South Sudan, which will open up more business for ALS. "ALS will be the preferred supplier of additional aircraft to this airline, mainly due its’ IOSA status," said Mr Muleya.

ALS is also eyeing leasing more aircraft to Southern Star’s cargo division which is being set-up. ALS has leasing agreements with a number of airlines in the region, including Rwandair in Kigali and Safarilink in Kenya.

Currently, ALS operate a fleet of 22 aircraft ranging from 19-seater to 37-seater jets and turboprops. New 50-seater aircraft are being introduced, which include the Dash 8 300 turboprops and Embraer 145 jets.

ALS mainly leases to airlines, oil companies and NGO’s.


ALS got a major boost in its leasing business when it was recently awarded the IATA Operational safety Audit certification for meeting international aviation safety standards.

Meanwhile, Tanzania largest airline, Precision Air last week announced its intention to list at the Dar Salaam Stock Exchange.

The plans that will see it raise Sh2.7billion to increase it operation into Southern Africa, West Africa and Central Africa regions.

"We intend to raise $30million. In two weeks time we will have received all the approval from the Capital Market Authority of Tanzania. And we are hoping that in October we shall be inviting East Africans to buy shares," Alfonse Kioko, the Group Managing Director and CEO said.

Kioko said the issue would be open to all East Africans, though it will not be cross-listed in respective bourses. He said that the shares to put on sale are the authorised shares but unauthorised.

Currently, Tanzanian businessman Michael Shirima owns 51 per cent stake while Kenyamag-glass_10x10.gif Airways owns 49 per cent.

The money to be raised will also be used to purchase a new Boeing aircraft that will serve in South Africa and West Africa route.

Early last week, the airline received Boeing 737-300 making it the eleventh aircraft in its fleet. "We want to increase our fleet to 17 by the end of next year from the current 11," he said. The new Boeing will fly between Nairobi and Dar es Salaam and Mwanza.

Looking to attract tourists from South Africa, Precision Air has extended its schedule flights to cover southern African regional cities through Johannesburg in South Africa. The airline launched its first flight from Tanzania’s capital city of Dar es Salaam to Johannesburg in South Africa last week. It will be flying to South Africa four times per week from its hub in Dar es Salaam using a new Boeing 737-300 airplane.

Launching of the first flight between Julius Nyerere International Airport (JNIA) and Oliver Tambo International Airport in Johannesburg took place recently with passengers enjoying a reduced ticket fare.

Mr Kioko said the newly-introduced flights connecting Tanzania and South Africa would attract more tourists from South Africa to visit Tanzania’s leading wildlife parks and Mount Kilimanjaro.

He said business travelers would also find it easier to fly between Tanzania and South Africa using the airplane with a capacity to carry 111 passengers.

—Additional reporting by Patrick Githinji and Patrick Kibet

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