DOUBLE TASK

Big task awaits Michael Joseph as he shifts focus back to KQ

Says he has devoted more time to Safaricom in the last three months but the appointment of a new CEO allows him to focus back

In Summary
  • The KQ chairman admits to be under pressure to help turnaround the airline, based on his past achievements at Safaricom
  •  KQ reported a Sh8.6 billion loss for the six months to June 30, which was more than double the Sh4billion loss reported in a similar period last year
Michael Joseph
Michael Joseph

Kenya Airways Chairman Michael Joseph has now thrown his full weight behind the national carrier’s boardroom affairs after last Thursday’s announcement of a new Safaricom CEO.

He admits to having focused more on the telco since he was appointed interim chief executive on July 1, despite heading the airline’s board.

“I have devoted a lot more time to Safaricom in the last three months than I have to Kenya Airways,” he said during an interview with a local television station.

A board member of Safaricom, he was appointed interim CEO after the demise of former CEO Bob Collymore, a position he was to hold “until the board communicates in due course, on a permanent appointment,” company secretary Kathryne Maundu had said during the appointment.

Last Thursday, Safaricom announced Peter Ndegwa as its new CEO effective April 1, 2020.

“Now that Peter has been appointed, I think it will give me room and space to go back to focus on Kenya Airways,” Joseph said.

He admits being under pressure to help turnaround the airline which has remained in deep loses for the past five years.

This is based on his achievements at Safaricom where he successfully headed the company between 2000 and 2010.

 “People are saying you did such a great job at Safaricom you can as well do a great job at Kenya Airways. It’s quite hard to deliver to such expectations but I certainly want to try,” Joseph said on Thursday night.

As he goes back full throttle at Kenya Airways, one of his headaches is the search for a potential successor of outgoing CEO Sebastian Mikosz.

The polish expat who was appointed in May 2017 announced in May this year that he will be exiting at the end of December, five months earlier than the end of his three-year contract.

“I have decided to resign on personal grounds effective December 31,” Mikosz said in the letter to employees.

The board is in the process of recruiting a new boss.

KQ, as it is known by its international code, is also at loggerheads with its pilots whose lobby group—Kenya Airline Pilots Association (KALPA) suspended Collective Bargaining Agreement (CBA) talks a fortnight ago and filed a trade dispute at the Labour Ministry.

KALPA has accused management of shortchanging them in the process of hiring pilots to bridge the current shortage, where it moved to hire pilots for Boeing 787 planes instead of the larger Embraer fleet.

Behind Joseph’s mind is also how to turn-around the fortunes of KQ which reported a Sh8.6 billion loss for the six months to June 30, more than double the Sh4billion loss reported in a similar period last year. There have been calls to nationalize the airline.

He is however determined to give his best in the revival of the airline which is currently implementing a turn-around strategy initiated in 2015, when it reported a record Sh25.7 billion loss, before sinking deeper in 2016 with an Sh26.2 billion loss.

“Kenya airways should be seen as a strategic asset of Kenya. We should position it that way not, just as a loss-making public company. My objective is not just to save it but to make it fly,” he said.

KQ is among the biggest losers on the share price at the Nairobi Securities Exchange in recent times as investors continue to miss out on dividends.

The Capital Markets Authority ‘Soundness Report Quarter 3 of 2019’ released on Friday ranks KQ as the second biggest losers at the bourse in the quarter ended September 2019, after Uchimi.

Its share value dropped by 35.77 per cent to close the period at Sh2.55 per share compared to Sh3.97 in quarter two(April–June).

It closed at Sh2.84 last Friday which was a slight gain (0.7 per cent) from Sh2.82 the previous day.

KALPA led by its chairman Captain Njoroge Murimi has blamed poor management for the turbulence at KQ.