Kenya Airways CEO Sebastian Mikosz speaks during a luncheon at Kenya Airways’ head office in Embakasi on June 27, 2018. His leadership strategy has contributed to the airline’s decline. PHOTO | FILE | NATION MEDIA GROUP The current and major issue that has contributed to the airline’s decline and subsequent losses is its aggressive expansion programme, coupled with internal rifts.
Stakeholders must hold the board to account for the continued decline of the airline and alleged bias against local managers.
A scrutiny of Kenya Airways reveals its precarious state and highlights its nosediving trajectory that has led to its multi-billion-shilling losses.
When it was separated from the original East African Community in 1977, KQ was incorporated and nationalised as Kenya’s national carrier.
In 1991, a board of directors was appointed to initiate commercialisation in anticipation of its privatisation. The board named a management team to streamline its operations, marketing and finances and, in 1995, KQ entered into a strategic partnership with KLM, Royal Dutch Airlines.
Soon after it made its initial public offering (IPO), KQ experienced significant growth in both fleet and routes.
By 2010, it had attained global airline status, bolstered by its alliance with KLM and Sky Team, and posted commendable profits within two years.
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Mismanagement, however, overshadowed these gains, leading to significant losses. These deficiencies may be categorised as preliminary faults and current faults.
In the initial stages post-privatisation, a poor ticketing strategy that offered unreasonably high discounts to travel agents led to heavy losses as revenue streams were potentially lower in comparison with a direct sales approach. As the agents inflated the price of the tickets, customers opted to travel with other airlines.
The private sector is reputed for its efficiency in the procurement of goods and services.Companies place value on not only quantity, but also quality while objectively securing commodities at competitive market rates that benefit both them and their customers.But KQ would frequently procure goods and services well above market rates.The current and major issue that has contributed to the airline’s decline and subsequent losses is its aggressive expansion programme, coupled with internal rifts. EMPLOYEE SATISFACTION In 2010, the directors sidelined management in KQ’s purchase of old aircraft from KLM, even though the planning committee had proposed fuel-efficient long-range aeroplanes. The airline subsequently sold the aeroplanes at a loss.In another misstep, a lease agreement with financiers for 20 aircraft, although it had merit, had suspicious fees […]
