It's a mixed bag for Michael Joseph as he formally exits Kenya Airways

Former Kenya Airways Chairman Michael Joseph at the airline's past investors briefing in Nairobi. [Wilberforce Okwiri, Nairobi]

Michael Joseph, on Friday, retired from the Kenya Airways (KQ) board, presiding over his last meeting with the airline’s shareholders.

His exit marked the end of a board career spanning a maximum tenure of nine years, marked by both highs and lows. 

“It has been a great privilege and honour to serve the company and the country in this position,” Joseph (pictured) told shareholders at KQ’s Annual General Meeting in Nairobi. 

“This is, however, a bitter-sweet moment for me as although there have been many challenges on the way, it has been a great joy to work with a dedicated team here at KQ and to be part of the journey that started nine years ago with the financial restructuring of the company to bring the airline to operating profit and with strong growth in both passenger numbers and freight volumes. 

“I will miss the interaction with Allan and his team, and in particular, as we navigated the ups and downs of the last nine years.”

The restructures that Joseph oversaw during his tenure included the one undertaken in 2027 that saw banks convert their loans to the carrier into equity.

This saw the consortium of banks – KQ Lenders Company 2017 Limited – emerge as the second largest shareholders with  38.9 per cent stake.

The government remains the largest shareholder with a 48.9 per cent stake. The restructuring also saw KLM’s stake diluted to 7.76 per cent from 26.7 per cent.

For the nine years that he steered the carrier as its chairman, KQ went deep into losses and posted its worst net loss of Sh38.26 billion in 2022.

It also clawed its way out of loss-making to report a profit of Sh5.4 billion in the year to December 2024, reporting a profit for the first in 11 years. 

“The company returned to profitability in 2024 after a period of over 10 years and remains on course to complete and sustain its turnaround journey… I look forward to seeing the company building on this momentum in the coming years. I am optimistic about what lies ahead for Kenya Airways,” he said

In announcing the exit, the carrier noted that during Joseph’s tenure, the carrier “reaffirmed to the shareholders and stakeholders the operational viability of the business.” 

While the carrier has been able to return to profitability, major issues that were expected to further push KQ remain pending.

It is still in a negative equity position with its liabilities of Sh297.36 billion exceeding its assets of Sh179.1 billion by Sh118.25 billion.

The carrier has also been pushing for the upgrade of JKIA, its main hub, and had even at some point proposed taking over and operating the airport. Joseph noted that the upgrade of JKIA is still a matter of urgency.

“The upgrade of JKIA remains a critical pillar needed to drive the growth of our business… It is our expectation that the upgrade will be prioritised in this coming year,” he said. 

The carrier has also been searching for a strategic partner but is yet to attract an investor. It was expected to have on-boarded a new major shareholder by end of last year but the carrier on Friday said this has been delayed owing to delays in approvals by the Treasury.

It noted that it is still talking to interested firms informally as it waits for government approval.

“The process (of bringing a strategic investor) is still ongoing. This is critical for the sustainable operations of our airline. It is a key priority area of focus as it will ensure that we secure a suitable strategic partner to recapitalise the business, support our growth and achieve capital stability,” said Joseph. “It is our hope that this will be done by 2026.”

When Joseph joined the carrier’s board, many watched to see if he would replicate the success that he had at Safaricom.

He started out at the telco 25 years ago and, as KQ notes, “he steered the company from a subscriber base of less than 18,000 in 2000 to over 17 million subscribers (at the time of his exit as CEO in 2010), making it the most successful company in East Africa.” 

“This phenomenal growth straddling over a decade was notable for the launch of many innovative products and services. He was behind the launch of the highly successful and phenomenal growth of M-Pesa and its related services.”

Joseph noted that despite the success he had at Safaricom, he was unprepared for what he found at KQ. 

“When I came to KQ as chairman, I do not think I realised and appreciated what it required to be chair of this board. You require patience and intellectual thinking about how to do things… this is a business that involves many moving parts,” he said on Friday.

“My advice to the incoming chair is that you have to have patience and the willingness to listen and learn.”