Kenya Airways (KQ, Nairobi Jomo Kenyatta) has appointed Steer Group to guide it on the most viable turnaround strategy in the face of deepening financial losses and depressed travel demand, reports Kenya’s Business Daily.
Chief Executive Officer Allan Kilavuka said the London-based consultancy firm took up the assignment in May and would be retained for three months. He did not immediately respond to a request for comment from ch-aviation.
“Kenya Airways has come up with short, medium, and long-term strategies to help in realising two main objectives. The first is to survive the current depressed market, and the second is to implement strategies that will make the business more sustainable in the long term. Steer Group is to validate these strategies and recommend any additional supportive or different strategies to help achieve the goals,” he told the newspaper.
A viable turnaround strategy for Kenya Airways is one of the conditions set for a KES255 billion shilling (USD2.3 billion) loan granted to the Kenyan government in March by the International Monetary Fund (IMF). In the loan deal, Kenya committed to auditing and reforming the operations of nine key state-owned enterprises (SOEs).
Aviation consultancy services offered by the Steer Group encompass aviation policy and regulation, government strategy review, regulatory review advisory studies, efficiency reviews, impact assessment, and evaluation support to changing legislation, according to company information.
Kenya Airways in 2016 already turned to McKinsey & Company to draw up a restructuring plan in the face of considerable losses. At the time, McKinsey developed a 24 point plan, focusing on debt restructuring and the sale of underutilised assets.
Meanwhile, the airline was in talks with its lenders last month to extend moratoria on the repayment of its loans as it expects its revenue to remain subdued this year amid low travel demand due to COVID-19. As previously reported, the airline needed KES55 billion (USD515 million) to survive over the coming year.
