Kenya Airways 2019

Abstract

Kenya airways, the once pride of Africa, has been struggling both operationally and financially for the last six years. During this period the company has recorded losses to the tune of over $700 million. These problems have been compounded by poor governance inadequate leadership that has failed to preserve and create sustainable shareholder value. In 2017 airline underwent a financial restructuring that saw the government and lenders convert the bulk of their debt to equity. This move did not achieve much in terms of eventual transformation of the airline other than reducing financial pressure. The Airline has continuously lost market share and competitive edge to regional carriers such as Ethiopia airlines and Middle eastern competitors such as Emirates due to what many call lack of a clear strategic direction from the board and the strategic management team. Kenya airways has failed to turn around its fortunes under the leadership of the last two CEOs. Mr. Sebastian mikosz, the current CEO who joined the airline barely two years ago and was believed to turnaround the airline has just announced that he was going for an early resignation come December 2019, six months before the expiry of his contract. The government, biggest shareholder is inclined towards nationalization of the airline to save it from becoming the plight of Africa. On the other hand, the board led by chairman Michael Joseph, is back to the drawing board in search for a new CEO to replace the outgoing Sebastian mikosz. The task at hand is for the board to decide what they want the future of Kenya airways to be. Should they decide the future of the company and then recruit the new CEO to fulfill this vison or should they hire a new CEO to decide the future of the airline?

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