This archive report was first published on 19 July 2020.
Kenya Airways is about to embark on a new chapter in its history, reverting to full government ownership after a failed privatization experiment. As the airline's former CEO, I, Joe Nyagah, have a unique perspective on the challenges we faced during the privatization process.
My tenure as CEO began in late 1987, when President Moi appointed me to prepare the airline for privatization. My new board and I made progress in addressing some of the issues, but we were eventually sacked. One of the major contributors to our sacking was our acquisition of aircraft at reasonable prices, which may not have pleased some powerful vested interests.
During my time at Kenya Airways, we identified several key issues that needed to be addressed. Firstly, the country's 'open sky' aviation policy allowed almost any airline to easily obtain approval to operate, putting pressure on KQ to handle all passenger traffic and cargo. Secondly, our old aircraft fleet was not competitive, especially on our main European routes, leading to high maintenance costs. Thirdly, the critical and profitable African network was almost non-existent. Fourthly, the use of technology was still very low, with almost everything being manual. Fifthly, we had less than 20 university graduates in a 4,000-strong workforce. Lastly, State ownership led to bureaucratic delays in decisions, resulting in lost opportunities.
Despite these challenges, we made significant progress during my tenure. We became aggressive in defending our traffic rights against competitors, and we added modern aircraft to our fleet, including Airbus, Fokker 50s, and leased Boeing 757s. We also expanded our lucrative African network, but faced government interference, which stopped us from flying to West Africa and South Africa at the last minute.
On human resources issues, we became a major employer of university graduates as management trainees, which enabled us to introduce technology and undertake a major redundancy exercise. We also introduced a pilot apprenticeship programme funded by UNDP.
However, the government's decision to bring in KLM as a partner after our departure did not make sense, and it's not surprising that it has failed. Meanwhile, the new board had brought in a BA management team to run the airline.
As Kenya Airways returns to full government ownership, the government should watch closely the following: the two regional main regional competitors, Ethiopian and RwandAir, operate in a much more politically controlled environment. KQ does not. The two countries are competing with Nairobi to make their capitals the regional hubs. KQ should compare the purchase prices of our aircraft with theirs, as I suspect ours are more expensive on similar-type aircraft, which may explain why KQ tickets are more expensive. The airline should also invest in the cargo business and put aviation-knowledgable teams at the board and management levels. Lastly, the government should isolate KQ from the normal parastatal controls that hinder timely decision-making, leading to big losses.
As the President-chaired National Civil Aviation Council makes this happen, I wish our national carrier success.
Mr Nyagah, a former Cabinet minister, was CEO of Kenya Airways.
