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Kenyans need credible answers on what is ailing our national carrier

ANYANG' NYONG'O
By Anyang' Nyong'o | May 10th 2015

Following my article last Sunday on what is ailing Kenya Airways, I received several phone calls and emails from many Kenyans who had experiences to share and information on the rot at KQ.

The picture that emerges is that of a business enterprise rapidly going down due to poor management, corruption, bad investment choices, lack of staff morale and a management at a loss on what needs to be done to turn the enterprise around.

KQ is Sh18 billion in debt, 20 years after the government wrote off Sh6 billion to get it going on a healthy balance sheet. Were we acting in vain then? Were we being taken on a long foolish ride?

Kenyans will recall that in 1995 Kenya Airways was a state-owned enterprise in which the government held total sway. Riddled with debt to the tune of Sh6 billion, the corporation did not know what to do. The government therefore invited the International Finance Corporation (IFC) to study the problem, restructure the corporation and present a blue print for the future. IFC recommended privatisation of the corporation. But the government had to write off the Sh6 billion debt so that the balance sheet of the corporation could be clean enough to attract investors. The proposal to do so was presented to Parliament where we held a rigorous debate challenging the government to ensure the Kenyan taxpayer was not duped into throwing good money after bad money.

The government gave an undertaking that after the debt write off, the restructuring exercise and privatisation, a competent board and management team would be put in place to ensure that a profitable and expansive KQ would indeed fly the skies as the Pride of Africa.

I must commend the new management and board that took over Kenya Airways in 1996 under the chairmanship of Isaac Omolo Okero. During the next seven years, KQ did not disappoint. The airline stabilised in management, expanded its fleets in partnership with KLM and was soon flying to many destinations than it had done before.

When the Sky Team Alliance was launched on June 22, 2000, KQ soon became one of the current 20 members. Sky Team is now the second largest alliance in the world, second only to Star Alliance and ahead of Oneworld according to information available in the public domain.

By the time time Titus Naikuni became the CEO in 2003, the business mood was good at KQ. Naikuni himself did not disappoint either. But after staying around for seven or so years, by 2009 Kenyans started receiving some bad vibrations from KQ. Somehow the rains were already beating us. Yes: the fleets were expanding. What of the brand new Embraers and dreams of getting Dreamliners? The future looked bright but the reality on the ground was not all that rosy. The strike by KQ staff that year was poorly handled by the management and from then on things were never the same again.

The very success of KQ in expansion was also the cause of its internal problems in terms of human resources management as well as poor business deals. The poor business deals were characterised by the chronic Kenyan bureaucratic disease: Corruption. Let us wind the clock forward.

Granted that the Ebola incident and cancellation of flights to West Africa was recently a set back to KQ’s profit margin, but why should that result in a rather long drawn quagmire in routing schedules for its flights to other destinations like Mumbai, Amsterdam, London, Entebbe, Dar es Salaam, Mombasa and Kigali? Flight cancellations have been rampant, leading to huge losses to KQ. There seems to be a problem in KQ involving pilots, engineers, airline service arrangements and saboteurs determined to bring the airline down so as to get its assets for a song. Consider the following observation which I received from one of those who reacted to my article last Sunday.

“Another avenue in which KQ is losing money is the maintenance agreement signed with Royal Thai airline, Qatar Airways, KLM, Aviac Technologies and others. What happens is that the airline or companies with maintenance agreements with KQ planes are grounded longer for minor and inconsequential defects so that their companies can maximise their earnings.

One such instance happened in Amsterdam when Kenya Airways lost Sh47 million in one flight because KLM engineers refused to clear the flight for take off over some “valve leak” which was found not to exist.

“When such a thing happens, KLM engineers would earn $250 per hour per engineer or $120 per technician. This money is paid directly by KQ to KLM accounts and is not inclusive of repair and spare parts costs.”

Why should KQ fail to station its own engineers in such locations even when it is evident that it can lose as much as Sh47 million in one night by depending on service from competitors? Why should KQ risk unnecessary flight delays and cancellations by being penny wise and pounds foolish?

It is interesting that in spite of screaming headlines in our newspapers regarding to the rot at KQ, nobody in the top echelons of the Jubilee administration has said a word. State House is moot; Transport Ministry has gone to sleep; Leader of the Majority in the House, was last heard of when he went on a wild goose chase looking for some list to pin down Al-Shabaab militants. Who shall delve into this matter and first and foremost tell Kenyans the truth behind the rot in search of salvation for our flag carrier?

In a motion of adjournment on a matter of national importance that I have moved in the Senate, I am asking the House to set up an ad hoc committee to look into this matter.

The committee, hopefully, will call for public hearings so that Kenyans with useful information can bring them to bear for us to save KQ. One of the Kenyans who must come forth and speak loud and clear is Titus Naikuni. The question most Kenyans are asking is the following: Did this swerve and urbane corporate manager set up KQ for imminent collapse just before he stepped down as CEO?

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