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Turnaround CEO who never got ailing KQ off the ground

By Macharia Kamau | October 29th 2019
Sebastian Mikosz CEO Kenya Airways speaks during an investors briefing and release of the financial results for the period April 1, 2017 to December 31, 2017. [Wilberforce Okwiri, Standard]

Sebastian Mikosz believes that Kenya Airways can live up to its tagline of being the pride of Africa again.

Only that he will not be the man to see it reclaim this position.

A lot of expectations had been placed on the turnaround chief executive when he reported to Nairobi in 2017, but in May this year, he announced he would be leaving at the end of December, several months before the end of his three-year contract.

While he might be optimistic that he has set the airline on the recovery path, his throwing in the towel raises questions as to whether KQ has reached a point where it is beyond saving.

When he took up the chief executive job, Mr Mikosz appeared to have been in it for the long haul.

He moved his family, including pets to Nairobi, an indication that he would at the very least see out his first three-year term.

He, however, chose to quit the struggling airline ahead of his contract expiry next year July.

While Mikosz still insists that his decision to quit was due to personal reasons, he hints that the issue of politics getting in the way of his running the airline may have proved the proverbial last straw.

“It came at an extremely high personal cost. It was much higher than I thought. The restructuring of an airline like this is also an energy killer. It sucks all the energy. There were very difficult moments, but I have chosen to judge the experience as extremely for my family and myself,” he said in an interview with Financial Standard.

“I was not hired to attract political attention, but I ended up doing it. With time, my mandate changed from restructuring an airline to include making a case for the change of the airline’s mandate. I was hired to restructure the airline but ended up showing that the airline cannot be restructured if we do not change the environment. Then, of course, you will find people who have made the company toxic when they start attacking you and not your decisions. Maybe I should have been tougher, but I believe I was tough.”

Mikosz said he would over the remaining two months “do everything to prove that KQ is moving in the right direction.”

“I am not walking away bitter and would like to stay connected to Kenya in future,” he said.

But despite his assurances and optimism, the CEO’s tenure was nothing short of underwhelming, having left the airline in no better shape than he found it.

Before his arrival, his reputation preceded him as the aviation sector turnaround CEO after a successful stint at LOT Polish Airlines in his native Poland.

He was, however, not able to replicate the success that earned him the title and leaves at a time when KQ is still making losses, having at first managed to reduce the losses before tumbling back into the red.

The airline reported a net loss of Sh8.56 billion for the six months to June 2019, compared with Sh4 billion last year.

He is also leaving with a bitter taste in the mouth after a failed bid for KQ to run the Jomo Kenyatta International Airport (KAA).

The Privately Initiated Investment Proposal (PIIP) to run JKIA that the airline made to Kenya Airports Authority (KAA) flopped on the back of several fronts, including the fact that the national carrier is still a loss-making entity as well as JKIA being fully Government-owned while KQ is semi-private.

MPs rejected the partnership with the airport but instead proposed the nationalisation of KQ as well as the formation of a holding company that will own all aviation entities, including the airline and KAA. This mirrors other jurisdictions such as Ethiopia, where the national carrier, Ethiopian Airline, is thriving on account of this.

Mikosz’s biggest achievement at KQ was launching the direct flights to New York in October last year.

While he conceded that the route is not the most lucrative, he insisted that it is a critical investment and would with time enhance Kenya as a continental aviation hub.

Already, he said, the airline has attracted a sizeable number of passengers from the region who are taking advantage of the reduced flying time.

“There are three major successes I would say we have had over the last close to three years. We have changed the mindset about KQ as a dying company despite major financial challenges we continue to operate under,” said Mikosz.

He said the only way KQ can regain its title as the pride of Africa is through nationalisation. This would change the mandate of the airline from the current focus on giving a return to shareholders and instead of assuming the role of a strategic asset that plays a bigger role in the economy as well as enhancing Nairobi as an aviation hub.

“The airline needs to continue with what we have started. There is also need to make a political decision to change the mandate of the airline. There is no one secret door that you will open and find miracles. It is a process, which we have already embarked on,” said Mikosz.

His looming exit also comes at a time when the national carrier is grappling with a biting pilots’ shortage that continues to deny it revenue.

The airline’s flight schedule requires 600 pilots, but only 414 have been operating. Also, a route network and fleet acquisition plan for 2019-2020 indicates that 537 pilots would be required by December 2020 if the struggling carrier is to operate optimally.

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