Kenya Airways gets new CEO to pilot a much needed turnaround

Kenya Airways' incoming CEO Mbuvi Ngunze. With the airline facing assaults on multiple fronts, including from Middle Eastern carriers, the negative effects of travel advisories facing the country and multiple security problems across Africa, its main market, Mr Ngunze has his work cut out. Photo/FILE  Nation Media Group

By PETERSON THIONG’O The EastAfrican

In Summary

• Mr Naikuni is widely credited for growing the company and guiding it through a series of challenges including a staff unrest, tough business environment and the Duala air crash, which the CEO counts as his lowest moment.
• The incoming CEO takes office at a period that is seen as crucial to the company’s long-term prospects, with his main task being to ensure that the airline gets back into the profit zone and is able to deploy its new planes profitably.
• With the airline facing assaults on multiple fronts, including from Middle Eastern carriers, the negative effects of travel advisories facing the country and multiple security problems across 

Kenya Airways has appointed Mbuvi Ngunze as its new CEO, replacing long serving Titus Naikuni, who steps down after 11 years at the helm of the national carrier.

 

In a widely expected move, the board last week announced it had settled on Mr Ngunze, 56, in a move analysts say paints a picture of a company keen on strategic continuity. He takes over on December 1.

Mr Ngunze has been seen as the most obvious successor to Mr Naikuni since his appointment as KQ’s chief operating officer in 2011 from Lafarge, where he held different positions across its global operations, ending his stay as the head of its Tanzania business unit.

“I am still absorbing the news of my appointment… but I will make my plans known in coming days,” said Mr Ngunze.

Mr Naikuni is widely credited for growing the company and guiding it through a series of challenges including a staff unrest, tough business environment and the Duala air crash, which the CEO counts as his lowest moment.

The incoming CEO takes office at a period that is seen as crucial to the company’s long-term prospects, with his main task being to ensure that the airline gets back into the profit zone and is able to deploy its new planes profitably.

Kenya Airways made an operating loss for the second time since it listed on the Nairobi Securities Exchange, posting a loss of Ksh2.7 billion ($31 million) in 2014 ,which though a substantial drop from the Ksh9 billion ($103 million) it posted in 2013, shows the mountain that the company has to climb.

The company made a net loss of Ksh3.3 billion ($37 million) compared with Ksh7.8 billion($88 million) in 2013. The airline has received two Boeing 787s as well a B777 this year and expects to receive a couple more later this year. growing its passenger capacity by an additional 40 per cent in the next 12 months. (See video)

“We plan to increase frequencies to Entebbe and Dar es Salaam while at the same time introducing flights to Beijing and Abuja,” said Mr Naikuni.

READ: African airlines beset by closed airspaces, small airports and high levies

But with the airline facing assaults on multiple fronts, including from Middle Eastern carriers, the negative effects of travel advisories facing the country and multiple security problems across Africa, its main market, Mr Ngunze has his work cut out.

“The travel advisories have cut passengers numbers on some routes by as much as 20 per cent,” said Mr Naikuni.

The airline is already struggling to attract passengers, with load factors dropping from 68.7 per cent in 2012/13 financial year to 65.6 per cent in the 12 months to March, well below the African average of 69.9 per cent.

The airline said it was considering taking up its options on both the Embraers and the 787s. One of the options for the 787 comes up at the end of the year, while the rest come up early next year.

“You really want to be patient and get the best deal… remember there are new variations of the 787 coming up every other month… we want to wait and get the best deal for ourselves.