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Major change coming for Kenya Airways

Major change coming for Kenya Airways

Kenya Airways’ Chairman of the Board, Mr. Michael Joseph, announced a short while ago that the company’s Group Managing Director and CEO, Mr. Mbuvi Ngunze, will leave the airline at the end of the first quarter of 2017.

It is understood that Mr. Ngunze will remain at Kenya Airways until a successor has been identified and has been able to take up his or her position.

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Today, Mbuvi is announcing that he will be leaving KQ effective first quarter 2017. By that time, he will have worked with KQ for over 5 years and as the Group Managing Director and CEO for 2 years, and felt it was a natural point in the company’s evolution to pass on the baton. While I regret this decision, I respect his position. Mbuvi will stay on until a successor is found which is expected to take some months.

The selection of the next CEO will be a thoughtful process led by myself together with the Board Governance and Nominations committee, which will focus on producing the right outcomes to lead KQ into its next chapter. I hope to complete this process within the next 3 months and I have already started the process to search for and identify the right candidate with the relevant airline experience.

During this period, the Board Chairman and the Group MD and CEO will work with the rest of the KQ senior leadership team to ensure continuity during the transition. Hence, this should not negatively impact our collaboration with our business partners, financiers and other stakeholders.

Although I have to date only worked with him for a short while; it has indeed been my privilege to work with Mbuvi so far. I know that over the last 2 years as Group MD and CEO, the Board has seen the dedication and selfless approach to work that he has had. Mbuvi has led KQ during an extremely challenging period, but nonetheless brought his unique leadership skills to bear, ensuring that the airline stayed afloat, leading from the front in negotiations with financiers and critical partners, and launching the turnaround which has achieved key milestones.

During this period, although KQ faced its challenges, Mbuvi and the team were able to analyze and articulate these challenges for various stakeholders to understand and support. The challenges faced by KQ over the last few years are not unique to it, as aviation is a cyclical business. What is critical is that these challenges have been faced with measured responses that are now clearly bearing fruit. These actions have included negotiating bridge financing for the business successfully, revisiting the commercial offer of KQ and organization, monetizing assets to keep the business in operation, fleet rationalization and improved utilization, reducing costs and improving productivity. The operational losses of the business have reduced substantially under his watch and KQ more than broke even at the half year period. Operation Pride will clearly place KQ on a stronger footing and provide a stable base for long term growth.

As we look to the future, the operational turnaround must stay in focus, but so too the financial stability of the business. The key outcomes desired during this phase of the turnaround are an improvement in liquidity and the reduction of the overall debt. Mbuvi is fully committed to this and will remain focused on delivering this before his departure and in ensuring a successful transition. Through this, we will end up with a company which is deleveraged, has a better rating, and one that is able to attract new capital.

On behalf of the Board of Directors, I wish Mbuvi, the KQ team and staff every success, as they continue with the Operation Pride turnaround initiatives and Capital Optimization project. Rest assured that they can count on the continued support, productive cooperation and commitment from the Board.

Michael Joseph
Board of Directors

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Sources close to the airline were swift in rejecting any claims by pilot union KALPA that this was a result of their illegal demand that Mr. Ngunze was removed from his position.

One regular source based at Jomo Kenyatta International Airport (JKIA) in fact went a step further and suggested that KALPA, true to their nature as economic disrupters and militant agitators, will soon turn their guns on Chairman Michael Joseph should he, the Board, and outgoing/new management not accept other demands on pay raises and better working conditions, something airline sources have in the past already rejected as unaffordable.

PHOTO: Kenya Airways Group Managing Director and CEO Mr. Mbuvi Ngunze

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