Michael Joseph calls for expert KQ directorsTuesday September 17 2019
Kenya Airways #ticker:KQ must avoid picking a board packed with politically-connected individuals after it is renationalised in order to ensure future success, its chairman said on Tuesday.
The loss-making airline, which is 48.9 percent government-owned and 7.8percent held by Air France-KLM, was privatised 23 years ago but sank into debt and losses in 2014. Lawmakers voted to re-nationalise it in July.
Chairman Michael Joseph said the requirement for professionals to be put in charge of the airline is being built into draft laws that will guide the renationalisation.
“It must be run in a commercial way,” he told reporters on the sidelines of an aviation meeting.
“We do not want to create a situation that we had before, where you nationalise the airline and all it becomes is a department of government. The board of directors is loaded by friends of politicians.”
The airline has also indicated that it will hire an additional 20 pilots despite opposition from a pilot’s union, setting the two parties on a collision course.
The carrier has suffered a shortage of pilots that has resulted in flight cancellations or delays, and frustrated customers.
“We don’t want to have more delays and cancellations — so we want to hire more pilots to come into Kenya Airways so that we can fly more. What we don’t understand is why we have been resisted by all means to stop hiring pilots,” said Mr Joseph.
A failed expansion drive and a slump in air travel forced the airline to restructure $2 billion of debt in 2017. But Kenya Airways still needed cash for fleet and route expansion amid growing competition from Ethiopian and Emirates.
Kenya wants to emulate countries like Ethiopia, which runs air transport assets — from airports to fuelling operations — under a single company, using funds from the more profitable parts to support others.
Under the model approved by lawmakers, Kenya Airways will become one of four subsidiaries in an Aviation Holding Company. The others will be Jomo Kenyatta International Airport, the country’s biggest airport, an aviation college and Kenya Airports Authority, which will operate all the nation’s other airports.
“We want to make sure that if you create a nationalised airline that it will operate as a semi-autonomous airline,” Mr Joseph said.
Competition among regional carriers rose at the end of last month when Uganda Airlines resumed flights after almost two decades.