Mbuvi Ngunze: Man whose dream of reviving KQ turned into a nightmare

Kenya Airways’ chief executive Mbuvi Ngunze was none the wiser on the evening of April 27 when he shook hands with representatives of the pilots’ union having seemingly reached an agreement averting a strike.

The courts had a few hours earlier issued orders stopping the airmen from downing their tools, offering the CEO extra comfort that operations at the airline’s JKIA hub would continue uninterrupted.

Mbuvi, one of the KQ chiefs the pilots wanted booted for alleged mismanagement, was checkmated a few hours later when the union rounded up its members for the strike.
Over 25 flights were cancelled, throwing the airline into a spin which, when it ended, left the cash-strapped national carrier Sh200 million poorer.

In October, the pilots were at it again — loudly reiterating their demand that the Harvard-trained executive exits the business alongside his chairman Ambassador Dennis Awori.

This time around, with State House’s uncharacteristic intervention, the pilots seemingly won as it has since been announced that the embattled chief executive will be replaced by April next year.

Former Safaricom CEO Michael Joseph has since taken over as chair. These staff upheavals were just some of the challenges that Mr Ngunze, a younger brother of Commercial Bank of Africa CEO Jeremy Ngunze, had to surmount since taking over the stewardship of the national carrier in December 2014.

Just a day after he was unveiled as the incoming boss in June 2014, the listed carrier announced a net loss of Sh3.38 billion for the 12 months to March 2014.

This second straight year of losses was Ngunze’s welcome to the big office, spelling out, in bleak numbers, the huge task which was ahead of him in rescuing the carrier from financial doldrums.

But Mbuvi, 49, was definitely conversant with KQ’s abysmal state; he had been the airline’s chief operating officer for three years before being internally tapped to replace Titus Naikuni.

KQ was dealing with a dip in load factors, travel advisories, biting fuel hedging contracts and loans, a weakened Kenya shilling, amassed VAT refunds, increased competition from Middle East carriers and a myriad of other issues.

It all seemed like a perpetually renewable reservoir of problems that were threatening to strip the country’s national carrier of its very essence — The Pride of Africa.

Nonetheless, the former Lafarge executive said he was “excited” about the appointment, oozing confidence that despite the prevailing “turbulent times”, the airline was “positioned for growth.” And he had a plan.

Two weeks after officially taking over, Ngunze announced that the carrier had hired US investment banker PJT Partners to help restructure its debt.

Their main task was renegotiating the maturity of loans to reduce the strain that repayment of short-term obligations was having on its cash flow, even forcing them to pay salaries using debt.

“We are a cash-hungry business. We recognise that this (debt) is one area of exposure,” he said on November 13, 2014, while also announcing that the airline had posted an after-tax loss of Sh10.45 billion for the half-year through September.

KQ shortly thereafter hired New York-based Seabury to evaluate its sales, ticketing and network planning and benchmark them with global best practice in the industry.

These two firms were precursors to the grand restructuring plan, Operation Pride, which saw the entry of yet another US-based firm — McKinsey & Co.

Operation Pride promises to close the airline’s profitability gap, revisit and streamline its operations and lastly develop a capital raising strategy with a target of about Sh60 billion.

“A year ago, we were being buried. We are still here. Though we have reported losses, we are focused on turning around the company. The plan will take us between 18 and 24 months,” Mr Ngunze said in an interview in November 2015.

While he remained clear on the plan’s viability, the pilots’ union poked holes in it, rubbishing it as an unsustainable cost-cutting strategy which only served as proof of his inability to lead the company.

Opinion on his character is diverse. Several staffers praised him as ‘‘intelligent”, a “hard worker”, a boss who led the company “without managerial airs” and one who was “not accustomed to buck passing.”

Another employee opined that Ngunze was able to “easily” transition from the cement world to aviation by allowing colleagues to educate him, regardless of their rank.

Several pilots however maintained their icy sentiments. A former pilot claimed Ngunze was not willing to distinguish between “employees and their role in the union”, creating an “emotionally-charged” rift which he said still exists.

One talent that even a strong critic attested to is his golfing skills. The acquaintance jokingly said he hoped the outgoing CEO had registered as much success on the “runway as he did on the greens.”

Mr Ngunze is a member of the Karen Country Club. In July 2013, at the same golf course, he shook off a strong field of 160 golfers to emerge the winner of the Citibank Corporate Golf Day contest with 38 points.

The Alliance High School alumnus’ favourite music instrument is the saxophone. To celebrate his 49th birthday last month, some employees organised for saxophonist Chris Bitok to do a surprise performance for him at Pride Centre, KQ’s headquarters in Embakasi.

He also has a palate for fine whisky, on the rocks. The father-of-one has no social media presence, choosing instead to receive information touching on the airline from colleagues.

He holds a Bachelor of Commerce degree (accounting option) from the University of Nairobi. He is listed on the institution’s website as one of Kenya’s prominent personalities to have studied there.

He is a chartered accountant (England and Wales) and a graduate of the Harvard Business School’s Management Development Programme. He started his career at PriceWaterhouseCoopers, working his way up to audit manager.

He joined Bamburi Cement in 1998 as finance manager, was promoted to the finance director a year later and in March 2002 appointed managing director Hima Cement Uganda, a Lafarge subsidiary. In May 2006, he moved to the headquarters of Lafarge in Paris.

Three years later he was appointed general manager for Mbeya Cement — Lafarge’s operations in Tanzania. He left Mbeya Cement for KQ in 2011, when the airline was launching the much-hyped but ill-fated Project Mawingu.

As he prepares to exit the national carrier, the chief executive is leaving behind yet another grand plan to be taken over, in all likelihood, by an expatriate. Mr Ngunze still maintains that he has no regrets about joining KQ.

“There are a lot of milestones which we have delivered. The next milestone for me is the financial structure we are working on and that should be a natural point to pass on the baton,” he said after news of his imminent departure broke.