The new chairman of Kenya Airways Mr Michael Joseph has said that the airline’s chief executive Mbuvi Ngunze will not resign as demanded by its pilots few weeks ago. Michael said Mbuvi is part of his turnaround strategy for the airline and also renegotiating loans with the airline’s financiers with a focus on improving the balance sheet.
“Mbuvi is crucial to me at the moment and I have told the pilots as much. He is in the middle of renegotiating with our financiers to get better terms in order for us to get out of the financial hole we are in. He is critical in that process since he knows and understands these people.” Noted former Safaricom CEO during a briefing on friday afternoon.
“We need to continue this process of strengthening our balance sheet by renegotiating some of our debt with our financiers. All these things are happening at the moment and therefore Mbuvi as the Chief Executive is vital for that project” he added.
Michael Joseph also noted that he will in the next two weeks fly to Netherlands to meet KLM Chief Executive Mr Pieter Elbers in a bid to re examine KQ’s Joint Venture Agreement with KLM. KLM owns about 400 million shares of Kenya Airways (26.7% stake) and there has been complaints from industry experts that an agreement entered in 2001 between the parties has been in favor of KLM. According to Michael, KLM executives are willing to amend some clauses in the agreement.
Meanwhile, the Kenya Airline Pilot Association (Kalpa) has officially withdrawn a strike notice that had been deferred last month citing progress on issues it raised regarding the carrier’s turnaround strategy.
KALPA had threatened to go on an indefinite strike and had demanded the exit of the airline’s chairman and chief executive before agreeing to postpone the walkout after former Safaricom CEO, Michael Joseph was appointed as the new chairman to replace Dennis Awori.
“Based on the progress on specific issues raised by KALPA, we are confident that these developments will positively impact on the airline’s recovery efforts,” the union said in a statement.
The airline recently released its financials for the six month period ended September, it cut its losses by 60% to Ksh 4.8 Billion from a loss of Ksh 12Billion.
Sources; (Kenyan Wallstreet, Reuters, Capital FM)
