× Digital News Videos Opinion Special Reports Lifestyle Central Coast Eastern Nairobi North Eastern Nyanza Rift Valley Western Business News Stocks Financial Standard Africa Asia America Europe Weird News Editorial Commentary Letters Crazy World Features Entertainment Money & Careers Health & Science Sci & Tech Home & Away Generation Next Cartoon Education Pointblank Environment Travel & Destination Columns Kipkoech Tanui uReport Kiambu Murang'a Nyandarua Kirinyaga Nyeri Baringo Bomet Elgeyo Kajiado Kericho Laikipia Nakuru Nandi Narok Samburu Trans Nzoia Turkana Mombasa Kwale Kilifi Tanariver Taita Taveta Kakamega Vihiga Bungoma Busia Siaya Kisumu Homabay Migori Kisii Nyamira Nairobi Uasin Gishu West Pokot Sunday Magazine The Hague Trial Kenya @ 50 Education and Training Health and Environment Insurance and Financial Security Housing Current Affairs Humour Makau Mutua David Oginde Clay Muganda Comand Your Morning Mohamed Wehliye Wednesday Life Alexander Chagema Arts & Culture Kamotho Waiganjo Barrack Muluka Xn Iraki Urban Rights - By Steve Ouma Branding Voice KCB Fredrick Ogola Sunday Magazine Wanja Kavengi Njoki Kaigai David Oginde Ken Opalo Daisy Maritim Houghton Irungu Hustle News Group Stages Round of 16 Quarter Finals Semi Finals Finals Third Place play-offs Opinion Dr Pesa Podcasts Round Table Sepetuko Eve Woman Ramadhan Special Fact Check Correction Explainers The Standard Insider Blog E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS

Michael Joseph: Kenya Airways to focus on restructuring its financing

By Reuters | October 27th 2016 at 12:00:00 GMT +0300

Kenya Airways (KQ) Chairman Michael Joseph. Kenya Airways needs to extend debt repayments and make other changes to restructure its balance sheet, which would take priority over finding a strategic partner, the new chairman of the loss-making airline told Reuters. (PHOTO: COURTESY)

NAIROBI: Kenya Airways needs to extend debt repayments and make other changes to restructure its balance sheet, which would take priority over finding a strategic partner, the new chairman of the loss-making airline told Reuters.

Shares in the carrier, 27 percent-owned by Air France KLM, have surged 68 percent this month on hopes of a turnaround after four straight years of losses.

The appointment of veteran telecoms executive Michael Joseph as chairman has also lifted sentiment. Pilots had threatened to strike from last week to demand management changes, but called off the action when Joseph's appointment was announced.

"Our first priority is to restructure the financing and once we have done that we can start thinking about a strategic investor but it is too early to talk about that at the moment," Joseph said.

Restructuring would aim to secure "longer (credit) terms, changes in interest rates", Joseph said on Wednesday, his official first day in the role after replacing Dennis Awori.

Asked about the fate of Chief Executive Mbuvi Ngunze who pilots also demanded should go, Joseph said: "The priority is stability in the airline. When you are restructuring your financing, you need continuation of leadership."

He did not elaborate.

Kenya Airways, also partly state owned and which carries 12,000 passengers a day in its fleet of Boeing and Embraer planes, has been hit in recent years by falling earnings due to a decline in the number of visitors to Kenya.

Tourism has been hurt by security worries stoked by Somali Islamist group al Shabaab's attacks in the country, in apparent retaliation for Kenya's military deployment in Somalia.

The airline has been reducing the size of its fleet, selling non-core assets like land and cutting jobs to recover from the losses it incurred after tourism slumped. It has also said previously that it requires fresh capital of 70 billion shillings ($691 million).

The management has previously said it was in talks with potential partners, but has not revealed any names.

Joseph, a long-serving executive of the telecoms industry in Britain and Kenya, said the carrier's modern fleet and well trained workforce would be key to returning it to profit.

"It is a matter of restoring the morale, changing things around making better working practices," he said, adding that "it might take a few months" to set the airline back on course.

Kenya Airways (KQ) Michael Joseph Air France KLM
Share this story

Read More