KQ marriage with KLM on the rocks as boss exits

Macharia Kamau
The long-running marriage between national carrier Kenya Airways and KLM Royal Dutch Airlines could be in its last days as KQ bids farewell to the last of the Dutchmen in its management. The Dutch carrier has for more than three decades dominated KQ with a heavy presence on its management and board, what with an agreement heavily skewed in favour of the KLM to run the show at KQ. This influence has, however, waned and nothing is more telling than the departure of Jan de Vegt who has been KQ’s chief operations officer seconded by KLM. SEE ALSO :Revealed: Secret talks to rescue KQ
Mr Vegt, who announced that he is leaving KQ on his Twitter account, gave the hints of a strained relationship between the two airlines and appeared to blame KQ for turning down assistance from KLM. He also paints a scenario where KQ appears to be flying blind by abolishing the COO post, a claim that KQ disputed. “Kenya Airways decided to stop all support by KLM. For this reason, I am returning to Amsterdam… as there will be no COO in KQ from now on, I will close this account. Until we meet again,” reads the dramatic post by Vegt. He did not say why he was leaving although sources at the airline said KQ did not wish to renew his contract. In regards to doing away with the COO position, the airline clarified that it had split it into two divisions and has already filled the posts with local talent. SEE ALSO :Government now changes tune on KQ takeover bid
“KQ has been undergoing a restructuring and as part of the initiatives the company took a strategic decision to delayer the COO area to enhance operational efficiency, agility in decision making and additional visibility of key issues in our business operations. The COO role was split into two areas – technical and operations divisions – now headed by Kenyans Evans Kihara and Paul Njoroge in their respective positions as division directors,” said Evelyne Munyoki Chief Human Resources Officer at KQ. Now, there are no expatriates seconded by the Dutch carrier in KQ’s management, while on the board, KLM is represented by one member, from three directors present as of March 2017. KLM might lose its seat on the board should the shareholding go below five per cent. KLM losing grip a on KQ has coincided with the exit later this year of Sebastian Mikosz as chief executive. The partnership between the two carriers started in 1996 when KLM was brought on board as a strategic partner to help turnaround KQ, then owned by the government. KLM had an upper hand in making decisions on a wide range of issues. These included appointment of directors, sale of aircraft, determining KQ’s route network and the allotment and issue of any shares in the capital of the company. SEE ALSO :KQ to resume daily direct US flights
Some Kenyans who have worked at KQ tell of how the benefits of the partnership between the two carriers were one-sided. KQ ended up with the short end of the stick. KLM also declined to offer assistance to KQ during the recent restructuring and instead offered in-kind assistance where KQ gets to use KLM’s IT systems. It was expected to offer Sh2.5 billion in cash and another Sh2.5 billion in kind. “During the restructuring, KLM was expected to defend its stake and put in Sh1 billion ($10 million) but this did not happen… everybody else was willing to chip in, even banks that were forced to convert debt to equity but KLM made little sacrifices and to date continues to enjoy the advantages that come with the partnership,” said the official. Following the restructuring, KLM’s stake was diluted to 7.8 per cent from 26.7 per cent.