Kenya Airways to go after persons who have run down airline, says chairman Awori

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Troubled national carrier Kenya Airways says it will institute criminal and civil charges against individuals involved in the scam that threw it into a tailspin.

KQ chairman Dennis Awori Thursday said in a paid advertisement that the company had instituted investigations into audit queries raised by Deloitte Consulting Ltd, indicating the airline had lost over Sh60 billion in four years.

Audit findings

The audit report extensively covered by The Standard showed KQ lost Sh61.1 billion after seven million tickets were issued below seat cost between 2012 and 2015.

The company also lost Sh2.2 billion in six months in an orchestrated scheme of incorrect billing and allowance of excess baggage.

“In the course of the investigations, cases of fraudulent activity have come to light that could have caused losses to the airline over a period of time,” Mr Awori said.

He said the board had considered and taken necessary action including strengthening of controls and processes, disciplinary action, sacking of staff found culpable and launching further investigations which may lead to criminal and civil prosecution in some instances.

Deloitte found out that the airline was bleeding from ticketing fraud, with the top 10 travel agents accounting for Sh3 billion of the losses, some of whom were inflating prices for tickets sold to corporate entities, creating the general consensus in the market that KQ is an expensive airline.

The company’s staff also had a hand in the jar where those with access to the Amadeus System would re-open closed fares and enable over-booking of tickets in lower fares. They would also change, cancel, refund and reissue tickets.

Revenue loss

Siphoning revenues from cargo was choreographed in at least 16 KQ stations across the globe, attributable to possible collusion, fraud, corruption and negligence by the airline’s management.

“Considering the sensitivity of the potential prosecutions, and the attendant criminal liability as may be established, the board cannot at this point give specifics of persons and amounts involved as this may jeopardize the case files under preparation,” Mr Awori said.

The KQ chairman also said that Operation Pride, the turnaround plan to save the airline was on course with the company saving Sh2.1 billion ($21 million) in three months.

“Operation pride is being implemented according to plan, and is already yielding positive results, which will be visible in the half-year report. As of the year ended March 31, the operating results improved by 75 per cent,” Awori said.

This even as the auditor questioned the rush to sell two planes bought at Sh2 billion for a paltry Sh210 million, stating that they could have fetched at least Sh600 million.

He said the strategy focuses on closing the gap to profitability of Sh20 billion ($200 million) and securing long-term and short-term loans to finance the structure of a new business model.