KENYA AIRWAYS APPOINTS TRANSACTION ADVISORS
(Posted 15th February 2016)
Kenya Airways has earlier today announced the appointment of PJT Partners as transaction advisors tasked to assist the airline in raising added capital and restructuring debt. KQ’s Group Chief Executive Mr. Mbuvi Ngunze described PJT in brief comments made available as ‘… a leading international investment banking firm with strategic airline advisory expertise necessary to counsel on Kenya Airway’s balance sheet restructure as well as capital raising. Their main business lines are on strategic advisory, restructuring as well as fund placement services’.
Sources close to the airline have also commented, rejecting criticism from certain quarters in Kenya, and saying that the turnaround strategy is unfolding on schedule. ‘The Board has taken a series of crucial decisions in recent months which have resulted in key staff changes which were reported in the media. It has also resulted in several of the redundant Boeing B777-200’s and Boeing B777-300’s to be sold or leased out which will bring financial relief. I find it highly regrettable that some Kenyans have turned into constant critics on social media instead of engaging in dialogue or understanding the complexities of implementing a turnaround strategy’.
Mr. Ngunze himself set a time frame of between 6 to 9 months before the various measures now underway will reflect on financial results which will take the airline well into the next financial year which in the case of Kenya Airways runs from 01st of April to the 31st of March each year.
Notably have sections of the Kenyan society made it their favourite pastime to clobber their national airline at every turn of the way, unlike in a neighbouring country north of us where such would be seen almost as an act of treason and where practically no one dares to post negative and acid social media comments critical of their national airline.
Firebrand lawyer Ahmednasir Abdullahi and others thankfully do not all have it their way on Twitter and Facebook as popular broadcaster Larry Madowo stood firmly by KQ which he called his ‘Favourite Airline’ while congratulating the airline’s Marketing Director Chris Diaz for the various initiatives recently introduced.
KQ raised the bar in their advertising campaign before Tanzania’s Fastjet commenced their long awaited flights from Dar es Salaam to Nairobi on the 11th of January. With Kenya Airways’ five flights a day on the route they clearly leveraged their market position to counter the lower fares Fastjet injected into the market. This left Fastjet to rake in first time flyers seeking the lowest fares while those in search of full service remain with KQ, not the least for the benefits of the airline’s frequent flyer programme.
With 42 African and 10 more international destinations does Kenya Airways remain an African aviation force to be reckoned with and various route combinations and schedule changes are thought to reflect further rationalization of equipment use after the disposal of the B777 fleet.
The night flight from Nairobi to Kigali now routes via Entebbe to increase the load factor while the B787 Dreamliner service between Nairobi and London too has taken a different shape, to on one side improve connectivity on the important North Atlantic route and on the other side to avoid having an aircraft sit on the ground in London for the entire day before the return flight.
What aviation pundits in general agree is that the level of taxes and fees airlines in general and Kenya Airways in particular have to pay is way too high if not outright excessive and AFRAA, the Africa Airline Association, has repeatedly shown the correlation between over-taxation and the rise, or decline in passenger numbers. Only time will of course tell how fast the restructuring measures taken by the board of the airline will show results but clearly has Kenya Airways turned the tide and is flying into calmer financial skies again.
