Transport and Infrastructure Cabinet Secretary James Macharia at the
Crowne Plaza Nairobi hotel on May 25, 2016. PHOTO | DIANA NGILA | NATION
MEDIA GROUP
More managerial changes at the Kenya Airways could be in the
offing as part of efforts to bring the airline back to profitability.
Transport and Infrastructure Cabinet Secretary James Macharia said leadership changes at the airline would continue as the government seeks long-term bailout solutions for the cash-strapped carrier.
The airline has in the recent months seen the exit of several executives, including the finance and human resource heads.
Mr Macharia said the management overhaul at the airline, which posted a net loss of Sh11.95 billion for the six months to September, is not over.
“We are reviewing the entire structure of management to ensure that we have the best people running KQ,” said Mr Macharia, while declining to discuss whether the chief executive Mbuvi Ngunze will be affected. “We are changing management on all levels. This is not a secret. You have seen us asking people at senior levels to leave. We shall be restoring capacity in terms of management.”
The minister was speaking to Kenyan journalists in Brussels, Belgium, where he is accompanying President Uhuru Kenyatta for the 2016 European Development Days (EDD) forum.
KQ’s top managers have found themselves in a tight spot, with the Senate calling for their dismissal.
The legislators have insisted that the Treasury, one of the airline’s shareholders, pegs a Sh60 billion bailout package on the changes.
The airline’s pilots joined the calls for management changes, culminating in a strike as they demanded that several managers, including the CEO, leave the national carrier.
They blamed their bosses for poor decisions, which they said, led to KQ posting a record Sh25.7 billion loss in the 2014/2015 financial year.
The airline’s HR director Alban Mwendar has since exited the company, while Captain Paul Mwangi was dropped as director for flight operations but remains a KQ pilot.
Mr Alex Mbugua, the firm’s long-serving finance director, was sacked in January, a move that has seen the former executive sue the airline for alleged wrongful termination.
Mr Mbugua’s exit, and that of other top managers, was seen as the clearest signal by the Treasury of its intent to clean up KQ’s C-suite.
“We are sitting with the board of directors of the airline to see how we can restore its financial viability,” said Mr Macharia.
“We have come from very far. Going forward, you will see a very big lot of improvement.”
KQ has hired American consultancy McKinsey to help restructure its business processes.
It is also selling assets, including aircraft and land.
African Export-Import Bank (Afrexim) last year agreed to lend KQ $200 million (Sh20 billion) as a bridging loan to ease its immediate cash-flow constraints, even as it seeks Sh60 billion injection in equity or debt.
Transport and Infrastructure Cabinet Secretary James Macharia said leadership changes at the airline would continue as the government seeks long-term bailout solutions for the cash-strapped carrier.
The airline has in the recent months seen the exit of several executives, including the finance and human resource heads.
Mr Macharia said the management overhaul at the airline, which posted a net loss of Sh11.95 billion for the six months to September, is not over.
“We are reviewing the entire structure of management to ensure that we have the best people running KQ,” said Mr Macharia, while declining to discuss whether the chief executive Mbuvi Ngunze will be affected. “We are changing management on all levels. This is not a secret. You have seen us asking people at senior levels to leave. We shall be restoring capacity in terms of management.”
The minister was speaking to Kenyan journalists in Brussels, Belgium, where he is accompanying President Uhuru Kenyatta for the 2016 European Development Days (EDD) forum.
KQ’s top managers have found themselves in a tight spot, with the Senate calling for their dismissal.
The legislators have insisted that the Treasury, one of the airline’s shareholders, pegs a Sh60 billion bailout package on the changes.
The airline’s pilots joined the calls for management changes, culminating in a strike as they demanded that several managers, including the CEO, leave the national carrier.
They blamed their bosses for poor decisions, which they said, led to KQ posting a record Sh25.7 billion loss in the 2014/2015 financial year.
The airline’s HR director Alban Mwendar has since exited the company, while Captain Paul Mwangi was dropped as director for flight operations but remains a KQ pilot.
Mr Alex Mbugua, the firm’s long-serving finance director, was sacked in January, a move that has seen the former executive sue the airline for alleged wrongful termination.
Mr Mbugua’s exit, and that of other top managers, was seen as the clearest signal by the Treasury of its intent to clean up KQ’s C-suite.
“We are sitting with the board of directors of the airline to see how we can restore its financial viability,” said Mr Macharia.
“We have come from very far. Going forward, you will see a very big lot of improvement.”
KQ has hired American consultancy McKinsey to help restructure its business processes.
It is also selling assets, including aircraft and land.
African Export-Import Bank (Afrexim) last year agreed to lend KQ $200 million (Sh20 billion) as a bridging loan to ease its immediate cash-flow constraints, even as it seeks Sh60 billion injection in equity or debt.
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