Kenya Airways (KQ, Nairobi Jomo Kenyatta) has hired Steer Group to develop the most viable turnaround strategy in the face of increasing financial losses and low travel demand, reports Kenyas Business Daily.
Chief Executive Officer Allan Kilavuka said the London-based consulting firm took on the assignment in May and will remain in office for three months. He did not immediately respond to a request for a statement from ch-aviation.
“Kenya Airways has developed short, medium and long term strategies to achieve two main goals. The first is to survive the currently depressed market and the second is to implement strategies that will make the business more sustainable in the long run. Steer Group will validate these strategies and recommend additional supportive or other strategies to achieve the goals, ”he told the newspaper.
A viable turnaround strategy for Kenya Airways is one of the terms of a KES 255 billion (US $ 2.3 billion) loan granted to the Kenyan government by the International Monetary Fund (IMF) in March. Under the loan agreement, Kenya committed to review and reform the operations of nine major state-owned companies (SOEs).
Aviation advisory services offered by Steer Group include aviation policy and regulation, government strategy review, regulatory review advisory studies, efficiency reviews, impact assessments, and assistance in assessing legislative changes based on company information.
Kenya Airways approached McKinsey & Company back in 2016 to prepare a restructuring plan in the face of significant losses. Back then, McKinsey developed a 24-point plan that focused on rescheduling and selling unused assets.
Meanwhile, the airline held talks with its lenders last month to extend moratoriums on loan repayment as it expects its earnings to remain subdued this year amid low travel demand due to COVID-19. As previously reported, it would take the airline KES 55 billion (US $ 515 million) to survive in the coming year.