From left: Dr Kamau Thugge, Nduva Muli and Pieter Elbers. The three are set for appointment by key shareholders as directors to the board of Kenya Airways. Photos/FILE
The board of Kenya Airways is set to change face as the national carrier receives three new directors appointed by principal shareholders.
The shareholders including Dutch airline KLM, which owns 26.7 per cent of KQ, and the Government, have witnessed changes in their top ranks prompting a shake-up of the airline’s board.
KLM on Wednesday appointed chief operating officer Pieter Elbers to the board following the July retirement of CEO Peter Hartman, who has been a KQ director since 2007.
The government, which has a 29 per cent stake, is preparing to replace former PSs Joseph Kinyua and Cyrus Njiru who have been replaced as top public servants in the Treasury and Transport ministries respectively.
Their positions will be taken by Kamau Thugge and Nduva Muli who were recently appointed Principal Secretaries of the two ministries which represent State interests at Kenya Airways.
The new directors are expected to shepherd the recovery of KQ, which recorded the biggest loss ever in the history of companies listed on the Nairobi Securities Exchange.
It is banking on cost-cutting measures to recover from the tough two years. Citigroup says that increased competition among global carriers and a soft global economy made it critical for KQ to cut costs and restore profits.
It projects the airline to post a net loss of Sh3.1 billion in the current financial year ending March 2014 on higher costs that will wipe out sales. This means that shareholders could face a three-year dividend drought. KQ failed to declare a dividend this year.
The airline, which listed at the NSE in 1996, previously only failed to pay a dividend in 1999.
KQ’s share price has fallen 31.3 per cent in the past year to the current price of Sh9.90, making it one of the worst performing counters at the NSE.
