FOCUS ON RESTORING SHAREHOLDER VALUE AND PROFITABILITY
(Posted 27th October 2016)
(Mbuvi Ngunze, Kenya Airways CEO, welcomes the airline’s investors and invited guests)
Kenya Airways is on the mend again, given some of the key indicators provided by the airline’s management this morning and notably has the most progress been made on African routes, where traffic grew by 14 percent with an overall rise of over 4 percent network wide.
This translates to 2.2 million passengers uplifted for the first half of this financial year and 949 million Kenya Shillings in operating profits, compared to the same period a year ago when the airline wrote a 2.2 billion Kenya Shillings loss.
These figures prove that the turnaround started by the airline’s management, dubbed ‘Operation Pride‘ has not just taken root but is already showing significant improvement all round.
Operation Pride, a recovery strategy formulated some time ago, focuses on the following three areas:
1. Closing the profitability gap
2. Refocusing business model
3. Optimizing capital
Kenya’s rather rabid unions, among them the Pilot’s union KALPA, will be hard pressed to talk such positive changes away, literally ripping the carpet from underneath their feet in their misguided quest to have all KQ managers either resign or be fired.
Also paying dividends are the fleet rationalisation exercise, which saw the Boeing B777’ pulled from service and substituted by Boeing B787’s which provide substantial operational savings. Again, this measure was vehemently opposed by the pilots union, exposing them as economic primary students who should concentrate flying KQ’s aircraft as they are told and when they are told and not meddling in politics.
Challenges remaining for this year are unpredictable foreign exchange markets with in particular the US Dollar under the spotlight ahead and after the upcoming US elections.
Some markets, like Nigeria, have also been affected by dramatic falls in commodity prices leading to austerity budgets and sharply lower passenger numbers, which led to the airline halting flights to Abuja but maintaining their daily Lagos services.
On the head table should Mr. Michael Joseph have taken his seat as Chairman of the Board of Directors of Kenya Airways, after he was elected to the position yesterday following the resignation of Ambassador Awori who served during a critical period of the company for just under a year. Notably though he was absent, just like when he was elected in absentia as a member of the board during the recent AGM of the company.
Ended Mr. Ngunze his presentation by saying ‘We’re in a marathon and not a sprint…and it is beginning to bear fruit‘, a sound assessment of the present situation the Pride of Africa finds itself in.