Allan Kilavuka gets another chance to steer Kenya Airways into profitability

Kenya Airways CEO, Allan Kilavuka. 

Photo credit: Illustration | Joseph Barasa

Observers must have expected Allan Kilavuka, the chief executive at Kenya Airways, to exit the corner office of the troubled national carrier with a thunderous speech that just fell short of declaring, ‘Free at last!’

Instead, the board of directors silently extended his term for another three years to April 2026.

“The board of Kenya Airways extended Allan’s term by three more years towards the end of last year,” said Michael Joseph, the chairperson of Kenya Airways.

Therefore, the bumpy ride continues for 51-year-old Kilavuka, whose decision to leave a well-paying job as General Electric’s head of operations in sub-Saharan Africa for loss-making Kenya Airways is akin to jumping from a well-anchored cruise ship into a storm-battered sailboat.

But Kilavuka, who explained in a past interview that the scar on his nose was a result of being thrown from a double-decker bed by a bully while in boarding primary school, is unfazed by a storm of criticism that has come from politicians, analysts, and journalists.

By putting a stop to his primary school bully, he came out with valuable lessons, chief among which was a gratifying sense of resilience and independence. These virtues have come in handy for him as a top executive of one of the most vilified corporations.

“Many people say I’m very calm when I have storms ahead of me, and I think that developed over time because of these kinds of things (learning from the bullying experience),” he said in the interview.

It has not been a smooth sail for Kilavuka at KQ, as the airline is known by its international code.

The airline has been in the red for 10 straight years, making jaw-dropping losses in the history of corporate Kenya. It made its worst loss of Sh38.26 billion in 2022 due to a surge in financing costs.

Moreover, the airline’s operational inadequacies, such as the flight delays or the recent case in which the tyre of its aircraft burst, have been a source of comic relief for some and angst for others.

Yet, Kilavuka, who revealed in a past interview that his friends sympathised with him when he took up the KQ job, has faith in the national carrier’s plan, which is perhaps why he has agreed to stay on.

“We have two key milestones. 2024 is the year we turn profitable, and 2027 is when we become sustainable,” said Kilavuka in a past commentary.

“Yes, we have a plan! What we are asking for is time and support!”

Last year, the airline, in which the Kenyan government has a 49 percent stake, cut its net loss by 40.7 percent to Sh22.69 billion as the airline continued to recover from the effects of the pandemic in which all countries stopped all the flights to help contain the spread of Covid-19.

Mr Kilavuka, who was the CEO of KQ’s low-cost carrier Jambojet, replaced Sebastian Mikosz, whose term ended on December 31, 2019. He believes the airline’s financial results for this year will show them cruising into profitability, and three years later, the airline will be completely out of the turbulence that has rocked it for the last 10 years.

In the commentary he wrote, the managing director urged Kenyans against hating on their national carrier. And yes, he insisted that the country needed a national carrier, noting that KQ’s intrinsic values go beyond the battered bottom line. As a national carrier, KQ is also about impact and purpose. It is a source of national pride, not only because it sells the brand Kenya to the outside world but also because it is flying tourists to Kenya as well as transporting fruits and flowers to the outside world.

He warned cynical Kenyans against entertaining the thought of getting someone to fill up the void of a national carrier.

“Some suppose that in the absence of KQ, someone can be brought in to fill the void. Wrong.

That would only work for as long as it was in the best interest of the said ‘someone.’ That someone would focus purely on return on investment,” he went.

A national, or flag, carrier airline is an airline that is subsidised or owned by the country in which they are registered. The airline often seeks preferential rights or privileges by the government for international operations.

The voices of those who want the government to let Kenya Airways go have only gotten louder as government support for KQ has grown bigger.

For example, the National Assembly’s Budget and Appropriations Committee, led by Kiharu MP Ndindi Nyoro, has asked lawmakers to approve a Sh1 billion bailout for the national carrier to partly fund its recurrent needs.

The airline’s failure to service government-guaranteed loans has seen the State take over KQ’s multi-billion shilling liability in the current fiscal year ending this month.

Taxpayers spent Sh17.4 billion in the nine months to March 2024 to service a $641.49 million (Sh83.4 billion) loan it took in 2017 to buy seven aircraft and an engine.

The loan, with a repayment period of 12 years, was originally provided by US lenders Citi Bank and JP Morgan before US export financer Private Export Funding Corporation (Pefco) took it over with the US Exim Bank and Kenyan government as guarantors.

The Treasury, as a principal shareholder in KQ, has been forced to continue offering financial support in a U-turn move to its earlier pledge to end bailouts on the back of a protracted process to get a strategic investor for the loss-making airline.

Mr Kilavuka hopes that KQ will soon be out of the woods, and proudly cut through the blue skies. But he knows too well that mistakes will still happen, but he must remain faithful to the grand plan of turning KQ into truly the pride of Africa.

“There is one thing I said when I took this job. I said, ‘I will make mistakes, but my intentions will always be pursued,” said the father of three.

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