Learning the right lessons from KQ saga

The State’s bid to nationalise Kenya Airways (KQ) which had been partially privatised in 1996 should not be used to undermine the rationale for Treasury to continue promoting private-public-partnerships.

Instead, the national carrier’s steady decline in profitability - particularly over the past six years should be a warning of what happens when factors other than competence and probity are allowed to select individuals who run firms.

Kenyans expect that the lessons learnt from the saga surrounding the airline will guide those entrusted with the responsibility of running the new vehicle - Kenya Aviation Corporation (KAC).

KAC is the entity that will be established to run a revamped Kenya Airways, Kenya Airport Authority and Aviation Investment Corporation.

One way of demonstrating that these lessons will not be lost is to draw up clear guidelines on how those picked to run these entities will be selected and their work evaluated on a regular basis. The sudden fall of KQ from grace to grass demonstrates that waiting for an entire financial year to learn how a company is doing is not good enough.

The experience also raises questions as to whether the annual scheduled audits can raise the red flag early enough for authorities to take action before it is too late.

Closer scrutiny

The role of boards is yet another area that requires a closer scrutiny to see how it can be strengthened without compromising the authority of the management to do their work.

Perhaps, the State may consider rethinking its proposal to buy out private investors including the banks who were arm-twisted to convert their loans into shares.

Allowing these shareholders to hold on to their shares and giving them seats on the re-constituted boards of management would increase the chances that the chief executives of these entities would not only be chosen competitively but also be better supervised.

The State would also do well for Kenyans were it to cast its net wide in its search for chief executives to run the new outfit.

After all, KQ was ushered into its short-lived period of profitability by an expatriate staff recruited from an airline that was running at a profit. It is an inescapable fact that Kenya does not have a pool of individuals with the requisite skills set.

The notion that individuals recruited from either the public sector or other sectors of the economy can run an airline has been debunked at a huge cost to the country.

There is need for the State to learn from the profitable airlines, including Ethiopian Airlines and those from the Middle East, and adopt their best practices.