The new chief executive of Kenya Airways Sebastian Mikosz is known for turning around Poland’s national carrier. He spoke to The EastAfrican's George Ngigi about his strategy for the current assignment.
-------------------------------------
Kenya Airways is renegotiating its debt with local banks. What progress have you made so far?
We
are hopeful the banks will convert part of the money owed into equity. I
am not at liberty to divulge much information at this point but we are
at the final stages of the negotiations.
Before your arrival, KQ had started a transformation journey dubbed Project Pride. Do you intend to carry on with it?
“Project
Pride” had the advantage of being systematic. I believe what has been
done so far has been beneficial. I want to continue with its
methodology.
But for an airline, decisions take time
to manifest. We are reviewing the financial status one line at a time
and ticking what needs to be done. There are things that we can
renegotiate in the short term, and we have started doing that, but there
are also those that will take longer.
For example, we
cannot pull out of an exclusive contract or out of an airport at the
snap of a finger; or terminate people who have been assigned tasks till
the end of year.
We are redesigning what is within
KQ’s operation — there is a team for that. My job is to bring about
financial results and there is a technical way of achieving that.
Part
of what your predecessor did was release some of the wide body aircraft
in a bid to cut costs. But considering plans to launch direct flights
to the US, do you have the long-haul aircraft to handle the route?
We
subleased some planes — three 777s to Turkish Airlines and two 787 to
Oman Air. I don’t see us bringing back the 777s in the short term, and
quite honestly also in the long term.
My decision is
to stick to the 787. It is a very good plane. It gives us exactly what
we need in the short term. We can fly it to Europe, Asia, big African
airports and even the US when that time comes.
To
control the cost of these long-haul aircraft, the more of the same type
of fleet you have the better your margins. If you have different types,
then you need separate crew, spare parts and different operations.
For
an airline, having less than 10 aircraft of a certain type is not
efficient. We have nearly 10 Dreamliners 787, so we are good at
operating them. I hope in the future we will have more of these aircraft
but from a wide-body perspective, we are good.
When should we expect the first direct flight to the US?
I would be cautious about commenting on the date because launching a regular flight is a complex operation.
Besides
the security details, there are other procedures like negotiating the
slots, having contractors in New York, putting the flight in the IT
system, preparing the crew and, the most important part, having
commercial agreements. It is easy to fly but it is even easier to fly an
empty aircraft.
You are mostly known for turning around LOT Polish Airline; how will you use the experience at KQ?
The
situation at KQ is similar to LOT’s where issues are handled only in a
certain way. There is a need for a shift in mindset. There is no African
or other way of doing things; there is only a good way and a bad way.
I
have seen companies in Asia, Europe and many other places suffer
similar problems. All you have to do is make the right decisions and
offer customers what they need. There is no easy way out and there will
be decisions that will rub some people the wrong way.
You brought on board staff you had worked with at LOT. Why so?
First
of all they are not part of the management; they are working with the
management. I brought in people whom I trust to work with the team.
How much capital is locked up in African countries that do not allow free movement of foreign currency?
We
have large amounts in Burundi and Angola. For the other countries, we
are trying to negotiate and pull the money out. This is an issue we have
tried to negotiate within the African Airlines Association as it does
not affect KQ only.
It is something that worries me
because you have a profitable route but if you bring in the impact of
the capital lock it becomes unprofitable.
KQ has been losing key talent, particularly pilots and engineers. How do you plan to address this issue?
We
shall be professional about it — by focusing on training our pilots in
Kenya. We presented the proposal to the board because we believe there
is a huge potential of training young Kenyans.
The
airline has its own training centre. There are other options like
bringing in foreign pilots for a while but this will not resolve the
issue.
There are concerns about the cost of KQ
tickets. Wouldn’t it be wise to lower the price of tickets and attract
higher load factors?
I disagree that our
tickets are overpriced. We must remain competitive. The whole issue
revolves around balancing revenue, yield, load factor and being
profitable.
My job is to strike a balance and the more
revenue I have the better I am able to do so. So load factor is one of
the key measurements, but we have routes with low load factors like 55
per cent that are quite profitable.
Some emerging regional airlines are threatening to eat into your market share. How do you plan to respond to them?
I
am here to work on KQ in the environment given to me. However, I appeal
to the government to look at the broader picture of how our competition
is structured and financed.
Look at Turkish Airlines
for example, where the government controls everything; the same applies
to Emirates, Etihad, Qatar and Ethiopia. We are operating in an open
competitive market well aware that these guys can hit us.
Background
Age: 44
Mikosz Sebastian has over 20 years of experience in executive management in the private and public sectors.
Mikosz Sebastian has over 20 years of experience in executive management in the private and public sectors.
Education:
Mr Mikosz is a graduate of the Institute of Political Studies in France
and holds a Master’s degree in Economics and Finance from Sciences Po
Paris.
Experience: Before joining KQ, Mr Mikosz was CEO of online travel agent eSky.pl for 15 months.
He previously held the position of CEO of LOT Polish Airline.
Mr
Mikosz has also worked with audit firms Arthur Andersen, where he
started his career in 1997 in Paris, and Deloitte as a director at its
Warsaw office.
He also served as vice president of the Polish Information and Foreign Investment Agency between 2003 and 2006.
No comments:
Post a Comment