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Kenya Airways CEO survives pilots’ onslaught

By Otiato Guguyu | November 5th 2016

Kenya Airways Chief Executive Mbuvi Ngunze has survived the onslaught by pilots who have backed down on their push to oust him.

Michael Joseph, the board chairman yesterday announced that Mr Ngunze was critical to the airline’s restructuring process and talks about his exit will only be held after the airline is back in shape.

Mr Joseph, who has held the post for only a week, said Kenya Airways was in a “very delicate position with the financiers of its planes and operations” to make any move on Ngunze.

“Yes the unions asked for his exit but I have discussed this with them and they understand the situation that we are in and have given us the necessary time to go through this restructuring before we do anything else,” Joseph said during his first public address since assuming stewardship of the board.

Pushed out managers

The former Safaricom chief executive officer added that Ngunze was in the thick of the process of strengthening Kenya Airways balance sheet by renegotiating some of their debt with the financiers.

Further, the chief executive is also key in the restructuring elements of operations in terms of what they have done and improvements of where KQ will fly, when it will fly and how much they spend including looking at revenue opportunity.

“All these things are happening at the moment and therefore Mr Ngunze, as the CEO of the airline is vital in that process,” Joseph said.

Kenya Airline Pilots Association (KALPA) managed to edge out the airline’s human resource director Alban Mwendar earlier in the year and board chairman Dennis Awori who left the company last week.

The pilots’ lobby had demanded the sacking of Ngunze as part of the October 18 strike notice which they withdrew following negotiations with the government. The pilots also successfully pushed out four senior managers along with Mr Mwendar in April.

Joseph also intimated that the board would be looking internally to fill in positions left vacant by Mwendar and Alex Mbugua, the chief finance officer who left in January.

“We do not have director of HR, substantive CFO. We should fill these positions, they are vital for the operations of KQ and we need to look at places where we can transfer people in the existing jobs,” Joseph said at the press briefing yesterday.

He said that since he was appointed, he has spent a lot of time with management team and the other operations at KQ and he thinks staffing needs to be strengthened like other airlines.

Ngunze, who was present during the briefing said the airline was focused on running two parallel processes -- capital optimisation programme, which is aimed at improving liquidity and looking to reduce overall debt and talking to potential investors.

“Nobody will put in money at this time of the capital optimisation because any dollar you put in now will be immediately diluted but it doesn’t stop us from having conversations with people who express potential for the future,” Ngunze said.

Operation Pride

He said that KQ was on course to achieving their target for the capital optimisation in quarter one of next year which is the first milestone set for recovery and after that they will talk on the capital plan.

The national carrier narrowed its losses to Sh4.8 billion in the first six months to September 2016 from Sh11.9 billion reported in a similar period last year.

The new board chair said his greatest task is motivating staff, strengthening management and continuing with Operation Pride, which is the turnaround strategy to change the fortunes of the airline.

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