KQ on the Path to Recovery Says Michael Joseph  25th Jun 2018

The Kenya Airways chairman is brimming with optimism as he talks of ‘bringing greatness back to Kenya via the national carrier’.

And Michael Joseph has cause to be upbeat. Barely a year into his tenure at the Pride of Africa, the airline’s losses have dropped from Sh25.8 billion in March 2016 to Sh6.04 billion in March 2018.

Add to this the airline’s recent launch of two non-stop African routes in less than a fortnight, one to Port Louis, Mauritius, and the other to Cape Town, South Africa.

“We have had our worst days, but that morass is now behind us,” states Mr Joseph.

 “My philosophy has always been to lead from the front,” he says, his face beaming with determination.

“That coupled with innovation worked well for me at Safaricom, whose M-Pesa platform has become a towering beacon in Africa and beyond. With equal resolve, I expect to take Kenya Airways to greater heights,” he declares.

 “We have registered significant improvement in performance and staff morale since I took the helm in October, 2016. Ours is to redeem the glory as we strive to remain the undisputed Pride of Africa. We have a long way to go, I must admit, but I’m convinced that we are on the right track”, he says.

“Our biggest hurdle is attitudinal change. Success in a national corporate such as ours requires that we work for the good of the airline and our nation, whose flag the airline carries, not for ourselves. It is doing the opposite that has pulled us down in the past. The challenge is human other than technical.”

I point out that Kenya Airways is not alone in the troubled African aviation industry that renders the continent’s airlines virtually non-competitive against other world carriers.

Joseph replies matter-of-factly: “I do not think aviation in Africa is in bad shape as such. It is obvious that our market is relatively small and our infrastructure not the best for reasons largely not of our own making

“Our undoing, and Kenya features prominently in this, is to adopt an open sky policy without first ensuring a level playing ground where things are balanced.”

He adds that some airlines flying into Kenya are not only subsidised by their governments, but have other benefits going for them such as the control of duty free shops, ground handling, catering services and government subsidy.

“That is why we have floated a public-private partnership venture with the Kenya Airports Authority (KAA) to make our airports, and more so JKIA, more efficient and profitable.”

Joseph says with the airport and other services under KQ’s ambit, it shall be more than just an airline relying on passengers and cargo.

“We shall pool our revenues and costs and attract more passengers and more airlines and be on a competitive keel with carriers that experience less head winds in their operations,” he says.

Is the contemplated return to oil hedging as a cushion not a miscalculation, going by past experience? Joseph says times have changed, with oil prices on a steady climb in the past two years. “The move is expected to help reduce the airline’s exposure to rising costs”.

On the fate of aircraft leased out or grounded to boost the airline at the height of its troubles, Joseph says the only aircraft deemed grounded is awaiting to be sold.

“Three Boeing 777-300 leased to Turkish Airlines are expected back in the stable by the end of 2019. We hope to retain them in our fleet, but they are rather expensive to run. We would prefer to sell them off and use the proceeds to buy smaller, cost-effective ones such as Embraer and Boeing 737s,” he adds.

New York route

He says one of the two Boeing 787 Dreamliners leased to Oman Air is expected back soon, ready for the much-anticipated launch of the Nairobi to New York route in October while the second one will be back by the end of the year.

Are the recent inaugural direct flights to Mauritius and Cape Town in the space of one week an indication of better days ahead?

Joseph’s face brightens as he nods. “It is foolhardy to expand when you are doing badly. New routes bring in fresh business and additional revenue through arriving and connecting passengers. As KQ soars again, there will be more such launches across Africa and beyond. On our radar are destinations in North Africa.”


Source: https://www.standardmedia.co.ke/business/article/2001285490/kenya-airways-recovery-plan-paying-off-michael-joseph-says

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