EDITORIAL: KQ must act on Deloitte forensic audit report

After some semblance of calm, corporate governance noise has resumed at Kenya Airways #ticker:KQ – this time involving former senior executives and their claims as to who was responsible for the firm’s rapid decline into loss-making.

Former finance director Alex Mbugua revelations on what transpired before his exit can only further erode confidence in the company’s ability to get back on its feet as soon as is possible.

The main issue appears to be that the company is yet to act on the outcome of a forensic audit that Deloitte Consulting conducted at the airline just before Mr Mbugua exited.

It cannot, however, be denied that this blame game has helped shed light on some of the issues the management has been unable or unwilling to make public for many years.

One of the most egregious of the issues is the revelation that heavy discounting of tickets was to blame for rapid slide into the loss-making territory.

This was in fact one of those matters that Deloitte identified as contributing to the losses and that needed to be confronted head on.

Whereas KQ has been regarded as the flag carrier that bears the country’s image both locally and abroad, it is also expected to do profitable business.

READ: Ex-finance chief reveals origins of KQ’s decline

The airline is certainly not a charitable organisation where well-connected people obtain tickets for themselves and relatives at heavily discounted prices.

Such behaviour has ensured that a certain group of people are always making trips abroad without ever paying for it even when some could actually afford it.

Judging from Mr Mbugua’s letter and the audit report, this is exactly what has happened at KQ for many years. Kenya Airways certainly gained some credibility with the appointment of former Safaricom CEO Michael Joseph as chairman, but clearly he cannot work alone.

Mr Joseph is supposed to oversee and not run the company on a daily basis. His is not an executive role. The management has to come in and inspire the rest of the team to do what is required.

If the Deloitte report is not appreciated and acted upon, we can only expect governance and ethics questions to persist at the company that badly needs a clear path to rapid recovery.