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Kenya Airways boss earns Sh62.8m in year of Sh7.5bn loss

Kenya Airways chief executive Sebastian Mikosz speaks during the airline’s EGM at KQ Pride Centre in Nairobi on August 7, 2017. PHOTO | SALATON NJAU | NMG
Kenya Airways chief executive Sebastian Mikosz speaks during the airline’s EGM at KQ Pride Centre in Nairobi on August 7, 2017. PHOTO | SALATON NJAU | NMG 

Kenya Airways Chief Executive Sebastian Mikosz was paid a total of Sh62.89 million last year, indicating average earnings of Sh5.2 million per month for the boss of the loss-making national carrier.

Mr Mikosz’s executive pay comprised a salary of Sh42 million, allowances worth Sh16.4 million and non-cash benefits amounting to Sh4.44 million.

The Polish citizen was hired in June 2017 to turn around the struggling airline that last year reported an after-tax loss of Sh7.5 billion, compared with Sh6.4 billion suffered in the previous year.

Listed companies are by law required to reveal the pay of their senior executives as well as directors.

The CEO’s pay stood at Sh46.69 million in 2017 during which he worked for seven months, translating into an average monthly pay of Sh6.67 million.

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This comprised a salary of Sh24.63 million, allowances (Sh18.6 million) and non-cash benefits (Sh3.4 million).

This means his average monthly pay reduced in 2018 compared to 2017.

During the period ended December 31, 2018, KQ chairman Michael Joseph, whose term ends this year, earned Sh18 million in fees compared with Sh13.5 million in 2017.

Cost-cutting measures

The national carrier, known by its international code KQ, continues to grapple with losses as cost-cutting measures put in place to boost its bottom line are yet to bear fruit.

The Sh7.55 billion net loss for the year ended December 2018 came in the backdrop of higher costs that offset a growth in revenue.

The 2018 results marked the sixth year in a row in which the Nairobi Securities Exchange-listed airline remained in the red.

2018 was also the fifth consecutive year that KQ shareholders missed dividend payouts.

The carrier last declared a dividend of Sh0.25 per share for the year ended March 2012, when it made a Sh1.6 billion net profit.

Mr Mikosz, who helped turn around flag carrier LOT Polish Airlines as its CEO, on April 30 during release of KQ’s financial results said he drew encouragement from what he termed as “an improvement in the company’s underlying performance.”

“These are decent results. They are not an explosion of success,” he said.
“The overall situation is improving. The investments are paying. And the losses are trimming.”

Mr Mikosz, whose terms ends in June next year, said then he is betting on fleet expansion, adding new routes and collaboration with African airlines that are seen to pose a threat to KQ’s regional market share for a better outlook in 2019.

Passenger bookings

KQ’s revenue in 2018 hit Sh114.18 billion, largely driven by passenger bookings.

Its revenue in the previous nine-month period stood at Sh80.7 billion.

The airline’s total operating costs stood at Sh114.87 billion in the period under review.

"Fuel, personnel and the cost of aircraft remain the top three drivers of airline costs contributing to about two thirds of total operating costs for the airline," said KQ, which last year resumed a controversial fuel hedging policy.

Mr Joseph said then the carrier is still betting on clinching a controversial deal to run the Jomo Kenyatta International Airport (JKIA) in Nairobi to boost its fortunes, but added that KQ would still survive if the deal fell through.

Parliament’s Transport and Housing committee has since rejected the controversial proposal.

Mr Mikosz had maintained that being allowed to manage JKIA would help the airline to remain relevant in the market at a time when carriers are witnessing increased competition.

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