KQ has weathered the worst and is set to soar higher

Tuesday March 14 2017

Kenya Airways planes at Jomo Kenyatta International Airport in Nairobi. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP

Kenya Airways planes at Jomo Kenyatta International Airport in Nairobi. PHOTO | JEFF ANGOTE | NATION MEDIA GROUP 

By MICHAEL JOSEPH
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Over the last two years, Kenya Airways has weathered the most turbulent period in its four-decade history. The airline has shown resilience against the after-shocks of its poor performance in the 2014-2015 the financial year. Pessimism about the future is slowly dissipating, thanks to aggressive measures for sustained recovery.

Kenya Airways is now on a promising trajectory. I wish to state unequivocally that Operation Pride – the turnaround strategy – is yielding fruit.

The work that has been done has led to improved financial and operational performance. In the last three quarters of the 2016-2017 financial year, the airline flew 3.4 million passengers, its highest number ever. We achieved this despite a tight fleet capacity arising from the lease and sale of some aircraft as part of measures to manage costs.

Most of this growth is coming from Africa, especially the north and east where growth was 9.6 per cent and 7.1 per cent.

For us, it’s not just about offering seamless connectivity, but also enabling the continent’s economic development. Last year, we were awarded the African Airlines Association Outstanding Service Award for services, innovation and competitiveness. We were also recognised by the World Travel Awards as the leading and best business class airline in Africa.

Fleet rationalisation is a core to the recovery. The other is improving connectivity. This includes increasing flight frequencies on certain routes. We are also reviewing strategic relationships with our key partners. One is that with KLM, which has undergone a series of iterations in line with our network optimisation. These changes will increase revenue from our European and North American markets. 

The aviation business is fraught with risks, ranging from bad weather to currency volatility and uncertain oil prices. Although our on-time-performance – a measure of operational efficiency – has improved overall, we had delays in December owing to bad weather in Europe and the Middle East.

CHRISTMAS PERIOD

Our subsidiary Jambojet also had delays over the Christmas period. We know that delays constitute a major pain point for our customers and we are working hard to minimise the inconvenience.

Kenya Airways has also been losing pilots and engineers. This is a major area of concern and a risk factor. The board has made some decisions aimed at attracting and retaining critical talent. Management has been working closely with the Kenya Airline Pilots Association to drive productivity.

Enhancing employee productivity remains a critical pillar of Operation Pride. As such, we have had to let go a number of employees and redeployed others. One major plank of our turnaround is the balance sheet optimisation, which this has been going on over the last six months. I recognise the strong support and willingness of our financial partners in liquidity and debt reduction. We have made significant progress. The next two months will be crucial.

The board has reviewed the contract with Mckinsey, the consulting firm on the turnaround. It was felt that since major steps under Operation Pride are now complete, the performance-based contract with Mckinsey required changes. We will now pay only for specific expertise.

Everything else is being done by the Kenya Airways team under a chief transformation officer.

In a nutshell, Operation Pride is in cruise mode and there’s no turning back. Prospects are shining brighter by the day. The dark days are certainly behind us. We may not be there yet but the gains so far achieved are something to be proud of. I urge all Kenyans to support the national carrier as it enters its next phase of growth as the pride of Africa.

Michael Joseph is board chairman, Kenya Airways.

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