Companies

Kenya Airways CEO to stay beyond March exit date

mbuvi ngunze

Kenya Airways CEO Mbuvi Ngunze. PHOTO | DIANA NGILA | NMG

Outgoing Kenya Airways chief executive Mbuvi Ngunze is set to stay in office beyond the initially announced exit date of end of March to allow the national carrier more time to search for a new boss.

The airline’s chairman Michael Joseph said the selection committee charged with hiring a new CEO has shortlisted four candidates whose credentials will be presented to the board at its next sitting on April 5, for the final pick and subsequent announcement.

Mr Ngunze, who has been at the carrier’s helm since December 2014, was expected to step down by end of this month, ending his career at the national carrier which he joined as chief operating officer five years ago.

READ: Man whose dream of reviving KQ turned into a nightmare

This change of guard at the airline, known as KQ by its international code, will now not happen until at least mid next month.

“We finished the interviewing process two weeks ago. We have shortlisted four candidates. I cannot disclose their nationalities. I will make the announcement middle of April,” said Mr Joseph in an interview.

Longer than expected

“The selection process took one or two weeks longer than expected. This is because members of the nominations committee do not all live in the same country and we have to meet to discuss.”

Mr Joseph – who joined the KQ board in October – added that if the candidate they eventually pick has to give notice at their current workplace, it may take even longer for them to assume office.

Despite not disclosing the nationalities of the four candidates on the shortlist, the chairman has also earlier said that the incoming CEO is “likely to be an expatriate” with “turnaround” experience in the sector.

“We do not also want to rush this process. It’s important that we make the right decision. The four names will be presented to the Board early next month. It’s only after that that can I make the announcement,” he said.

The NSE-listed airline has in recent years come under financial pressure weighed by expensive loans and fuel hedging pacts, low tourist numbers, foreign exchange losses and the Ebola outbreak among several other negative factors.

KQ, which is 29.8 per cent owned by the Treasury and 26.7 per cent by Air France-KLM, has posted four consecutive full-year losses beginning March 2013. In the year to March 2016, it recorded a net loss of Sh26.2 billion.

READ: Kenya Airways says pilot exits have slowed down

Industrial strikes

The airline was hit by industrial strikes on several occasions last year, with its pilots demanding that Mr Ngunze exits the company, accusing him and Mr Joseph’s predecessor — Ambassador Dennis Awori — of mismanagement.

KQ, with the assistance of US consultancy McKinsey, has been implementing a back-to-profitability plan which had involved actions like the sale or lease of aircraft, balance sheet restructuring and staff cuts among others.

Once the balance sheet restructuring is completed, the incoming boss and the airline’s board will have to turn on the charm to attract Sh60 billion which the airline needs to stay afloat.

“The plan is to have completed the financial restructuring by the time the new CEO is coming in. We cannot expect the new person to engage in that,” Mr Joseph said in an earlier interview.

“What I hope will happen is that we shall get some cash inflow from both KLM and the Kenya government and we shall see whether that is enough to take us forward.”

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