A Kenya Airways plane at the JKIA in Nairobi. FILE PHOTO | NMG National carrier Kenya Airways has picked a UK consultancy firm, Steer Group, to guide it on the most viable turnaround strategy options in the face of deepening financial losses and depressed passenger numbers.
KQ chief executive officer Allan Kilavuka said the London-based firm took up the assignment in May and will be retained for three months.
“Kenya Airways has come up with short, medium, and long-term strategies to help in realising two main objectives.
The first is to survive the current depressed market, and the second is to implement strategies that will make the business more sustainable in the long term. Steer Group is to validate these strategies and recommend any additional supportive, or different strategies to help achieve the goals,” he told Business Daily .
Crafting a viable turnaround strategy for KQ was one of the conditions for the Sh255 billion loan to the Kenya government from the International Monetary Fund(IMF) in March.
In the loan deal, Kenya committed to audit and reform the operations of nine key State-Owned Enterprises (SOEs) to ensure their viability.
These include Kenya Airways, Kenya Airports Authority, Kenya Railways Corporation, Kenya Power and Lighting Company , Kenya Electricity Generating Company , Kenya Ports Authority, and three of the largest universities. For Kenya Airways, the government committed to hiring an independent consultant to audit the airline and find the cheapest way of restructuring it.
“We can confirm that the government is progressing well with the implementation of their staged approach to assess, monitor, and address vulnerabilities in the State-Owned Enterprises. Given the special circumstances and uncertainty facing the global airline industry, Kenya Airways has retained an international aviation expert to assist in defining a set of strategies for its future”, an IMF spokesperson told the Business Daily.
KQ’s net loss nearly tripled to Sh36.2 billion in the year ended December 2020, the worst ever in the history of the airline in the wake of the economic fallout of the Covid-19 pandemic—extending a chain of losses for close to a decade.
Steer Group is expected to review and propose options with the least cost and which are most effective in steering Kenya Airways back to sound financial footing.
The group’s mandate also includes advising on a supportive framework, structure, and operational setup which will support the airline’s recovery.Steer Group beat eight other firms in the race for the job. “The final […]