Deal that earned new KQ boss his job

Kenya Airways’ new chief executive Sebastian Mikosz is expected to increase its passenger numbers, further cut its operational costs, optimise its assets, review its networks, and reduce its dependency on shareholder bailouts.

The Polish national and aviation turnaround specialist is expected to push the national carrier towards self-sustenance in the short term, The EastAfrican has learnt.

Transport Cabinet Secretary James Macharia told The EastAfrican that the incoming chief executive got the job because of his strong aviation experience, reputation and record, which saw him turn around LOT Polish Airlines to profitability after years of government bailouts.

“Our airline is facing the same issues his previous airline did. We were impressed with his strategy, as KQ shares a similar challenge. He is up to the task,” Mr Macharia said.

“It’s his credentials that got him the job. We will be banking on them to make a success out of our airline. In him, we got the best candidate and his credentials will be a plus to our national carrier. We believe he has what it takes to navigate us back to profitability in the short term,” Mr Macharia said.

Mr Mikosz is expected in Nairobi mid this month. He is reputed to be a cost management sleuth, a factor that KQ badly needs to come out of the red. It also needs $600 million to stay on a straight course.

Mr Mikosz was tapped twice, in 2009 and later again in 2013, by the Polish government to head the LOT Polish Airlines, in which the state has a 69.97 per cent stake.

LOT, like KQ today, was in the middle of a financial crisis, had lost its market share, faced a labour crisis and consistently posted losses, which threatened to send it into bankruptcy. Within six years, in his two stints as the chief executive, he reduce the headcount, improved liquidity and changed the operations style cutting net losses to $42 million, from a massive $187 million.

But during his first stint at LOT, he faced opposition over his proposed workforce and salary cuts, while cutting down its dependence on government aid, and eventually quit after he failed to meet the government’s timelines in the turnaround plan.

The KQ board is pushing for a quick turnaround. In a previous interview, former board chairman Dennis Awori hinted at seeing the airline back to profitability in the next year or two, with a projected profit of $20 million.

“We want him to do the turnaround in the shortest time possible as we have a great outlook for the airline,” Mr Macharia said this week.

The incoming chief executive managed to convert the regional European airline into a long range carrier, optimising the use of its Boeing 787 Dreamliner fleet to achieve success. He is now expected to replicate that with KQ, whose strength has been intra-Africa networks, where it has been pushing the long haul customers to its Sky Alliance partners, including its other shareholder KLM, through codeshare agreements.

“We hope to start flights to the United States soon, and through his strategy, we should see more of such operations across the globe, farther in the Americas and East Asia,” Mr Macharia said.

In an interview with the Financial Times, Mr Mikosz said that he wanted as little government aid as possible for the Polish Airlines.

“I am always not happy reaching out for government assistance. We want the aid to be as small as possible, so we are pushing ahead with cost cutting measures to squeeze as much savings as possible from all the aspects of our operations,” he said.

Kenya Airways board chairman Michael Joseph said that outgoing CEO Mbuvi Ngunze will stay on as an advisor till the end of July.