Kenya Airways chief executive Mbuvi Ngunze’s resignation has paved the way for the return of an expatriate to the cash-strapped national carrier’s corner office.
Michael Joseph, the airline’s board chairman, yesterday told the Business Daily that a “worldwide” search is on for an aviation expert to take over the hot seat that Mr Ngunze will be vacating after just two years.
The former Safaricom CEO said the airline's new boss, who could be in office as soon as April next year, “is likely to be an expatriate” who has wide knowledge of and experience in the aviation sector.
“This search is global. I honestly do not think we have a local person with the experience we are looking for,” said Mr Joseph in a telephone interview.
Brian Davies, a Briton, was the last expatriate chief executive at Kenya Airways for the seven years to 1999.
Mr Davies, who was at the helm when the government privatised KQ (as the national carrier is known by its international code) in 1996, won many accolades for his performance and has recently received positive mentions at Senate hearings investigating KQ’s current financial misfortunes.
Recruitment drive on
“We shall, however, consider everybody; nobody will be locked out. But it is very likely that the person we shall settle on for the position of CEO will be an expatriate,” added Mr Joseph.
Richard Nyaga took over after Mr Davies’ exit and was succeeded by Titus Naikuni, who headed the company for 11 years until two years ago.
Brian Presbury was acting CEO for a short stint before Mr Naikuni’s appointment.
A statement issued yesterday indicated that the recruitment of the new KQ boss has commenced and that the process is likely to be complete in the next three months.
Mr Ngunze, who has been at the helm since December 2014, is expected to step down by end of March next year — ending his career at the national carrier which he joined as chief operating officer five years ago.
His exit is a big win for the airline’s pilots who early last month threatened to go on strike to push for the resignation of the KQ chief executive and then chairman, Dennis Awori.
The pilots, through the Kenya Airlines Pilot Association (Kalpa), have accused the two individuals of mismanaging the Nairobi Securities Exchange-listed firm, leaving it desperate for a bailout of approximately Sh60 billion.
Kalpa only deferred the strike after the government, led by President Uhuru Kenyatta’s chief of staff Joseph Kinyua, promised them swift action against top KQ officials found to have been responsible for the airline’s troubles.
Mr Awori was shortly thereafter replaced by Mr Joseph and Mr Ngunze will soon be leaving, handing Kalpa the management change they desired.
Mr Joseph denied that the pilots’ demands had a role in the chief executive’s departure, adding that was always on the cards since he took over the leadership of the board.
“Mr Ngunze is critical to the financial reorganisation process and he will stay on to ensure that that is completed successfully,” he said, adding that the outgoing CEO will be “compensated accordingly.”
“We expect this balance sheet reorganisation to be completed in the first quarter of next year. We want to have a new CEO in place after that, hence the decision to start recruitment now and announce Mbuvi’s exit. The timing is right.”
Mr Ngunze has worked for over a decade with cement maker Lafarge. His last engagement before joining KQ in September 2011 was as general manager for the Lafarge operations in Tanzania, Mbeya Cement.
After three years as Kenya Airways chief operating officer, he was promoted to the position of CEO to replace Mr Naikuni, with KQ’s board looking to tap into his operational knowledge of the airline.
Since becoming CEO, the airline has recorded losses. It posted a net loss of Sh26.2 billion in financial year to March 2016 — worse than the previous year’s Sh25.7 billion.
“There are a lot of milestones which we have delivered,” Mr Ngunze told the Business Daily in a telephone interview after news broke of his imminent departure.
“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.”
KQ late last year hired US consultancy McKinsey to help implement a restructuring of the company and lift it out of the financial hole it found itself in.
This plan, dubbed Operation Pride, includes staff cuts, selling or sub-leasing aircraft, selling of land and renegotiating aircraft maintenance contracts to save costs among a host of other measures meant to cut costs and boost revenue.
The airline also contracted Deloitte to conduct a forensic audit of the national carrier to establish when matters took a turn for the worse and who was responsible.
The audit revealed massive theft in the business, further emboldening KQ pilots to make fresh management change demands.
KQ’s incoming CEO will now be expected to continue implementing the turnaround plan as well as implement the recommendations of the Deloitte report, which implicates some individuals who have since left the company.