Kenya airways planes on March 24, 2020 at Jomo
Kenyatta international Airport, grounded following the outbreak of
COVID-19. [Edward Kiplimo, Standard]
Kenya Airways (KQ) pilots have spoken of unfinished business even as the
national carrier prepares to de-list from the Nairobi Securities
Exchange and become a State corporation.
On Friday, a Bill that would pave the way for the nationalisation was
tabled in the National Assembly, with the minority shares held by banks
expected to be converted into long-term Treasury Bonds.
The national carrier, which was already in a financial hole, has been
hit hard by the adverse effects of the Covid-19 pandemic that led to a
ban on international passenger flights across the world as a means to
contain the spread of the respiratory infection.
MPs will now start debate on The National Aviation Management Bill,
2020 as the National Assembly seeks to have the government take back
full control of the national carrier by October.
But the KQ pilots say there are some unresolved issues that could hinder a smooth nationalisation process.
Among them, they say, is failure by the management to act on a report by
Deloitte, which detailed how the company lost billions through foreign
exchange repatriations.
Millions lost
According to Kenya Airline Pilots Association, while some small fish
were fingered, the executives higher up in the management who were
responsible for the dip in the airline’s fortunes went unscathed.
An estimated Sh400 million is thought to have been lost through the
foreign exchange deals negotiated at below market rates, for the South
African Rand and Emirati Dirham.
Deloitte recommended that former Chief Executive Mbuvi Ngunze, former
Finance Director Alex Mbugua and three other senior managers face
disciplinary proceedings.
Mr Ngunze and Mr Mbugua were found to have been liable for violating
company policies in handling of foreign earnings and dealing with a
certain bank where they negotiated a Sh700 million bank guarantee
against the ceiling of Sh500 million.
“We recommend disciplinary proceedings for all staff who have been
identified to have conducted themselves contrary to the provisions of
company policies,” said Deloitte in its report commissioned by the
airline’s board of directors as part of an investigation into the
corporation’s affairs.
The bad blood between KQ and its pilots’ union has escalated even as a
biting shortage of pilots continues to cost the airline much-needed
revenue.
Retired Captain John Lewis Smith, who has over 40 years flying
experience and more than 22,000 flight hours, says the management of the
national carrier was wanting.
“Having looked at the boards of Kenya Airways spanning the last 16
years, KQ lacks the relevant aviation expertise and experience as
compared to other major international airlines,” he told Weekend
Business.
An experienced aircraft engineer, Kenneth Mwangi said industry standards
in board selection of an airline are based on relevant aviation skills,
and the positions are not for just anyone.
“A lack of an aviation engineering oversight board can result to huge
losses as clearly seen in the end of year results,” he said.
KQ, which is owned 48.9 per cent by the government and 7.8 per cent by
Air France-KLM, was privatised 24 years ago, but sank into debt and
losses in 2014.
Following the impact of Covid-19, there are fears that the carrier could
lose up to $500 million (Sh53 billion) in revenues by the end of this
year due to disruptions associated with the coronavirus, which has
grounded the airline’s passenger operations.
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