Nationalize Kenya Airways!!

[Georgesoros]

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Oh boy...
bad idea. After they let it sink now they want a tax payer bailout.

https://www.yahoo.com/finance/news/kenya-airways-chairman-calls-professional-095149418.html

[RV Pundit]

Whatever needs to be done to save the airline...but maybe send Kinoti, NIS and DCI to clean up corruption in there.

[Nefertiti]

KQ is not hogged by corruption but inefficiency. I schemed a leaked McKinsey report - checking if it might go bullish in future - and it a haemorrhage of cash through inefficiency or mismanagement. I read Ndii's rants - comparing KQ with Equity - and tarnishing Project Wingu fleet expansion under Naikuni. But you can't compare fat margin business banking with razor-margin airlines. Because of low leverages of such heavy equipment business - it costly as manufacturing - you need very adroit strategy. The fleet expansion was good but so poorly excuted. So they ended up in huge debt and shrinking revenues. It incompetence 101... such a sub-optimal network. Because of archaic tech full of legacy ERP's and crap - they could not even tap analytics to foresee the oil plunge of the 2010s. The billions hedged would have plugged the cash pit of poor network but instead they fumbled on all fronts.

So yes there is a few kickbacks and dodgy contracts. But that is chronic and not the cause of bankruptcy. Not even Al Shaabab, ebola or election scapegoat. Network optimization + fuel savings - if it had been properly done - KQ would be swinging like Ethiopia or Emirates.

In short let Sebastian Mikosz - the Polish receiver manager - do his thing with MJ. I don't think MJ's telco record can help him much - cause you need lean thinking. But maybe his nework can lineup the creditors and GoK.

[Georgesoros]

KQ is not hogged by corruption but inefficiency. I schemed a leaked McKinsey report - checking if it might go bullish in future - and it a haemorrhage of cash through inefficiency or mismanagement. I read Ndii's rants - comparing KQ with Equity - and tarnishing Project Wingu fleet expansion under Naikuni. But you can't compare fat margin business banking with razor-margin airlines. Because of low leverages of such heavy equipment business - it costly as manufacturing - you need very adroit strategy. The fleet expansion was good but so poorly excuted. So they ended up in huge debt and shrinking revenues. It incompetence 101... such a sub-optimal network. Because of archaic tech full of legacy ERP's and crap - they could not even tap analytics to foresee the oil plunge of the 2010s. The billions hedged would have plugged the cash pit of poor network but instead they fumbled on all fronts.

So yes there is a few kickbacks and dodgy contracts. But that is chronic and not the cause of bankruptcy. Not even Al Shaabab, ebola or election scapegoat. Network optimization + fuel savings - if it had been properly done - KQ would be swinging like Ethiopia or Emirates.

In short let Sebastian Mikosz - the Polish receiver manager - do his thing with MJ. I don't think MJ's telco record can help him much - cause you need lean thinking. But maybe his nework can lineup the creditors and GoK.

Thanks for the analysis.
Where did you get the report.?
Anyway Kenyans are known to think like Trump. Rush into something without doing a thorough analysis. According to what you're saying, poor planning has killed the company.

[Nefertiti]

Parkerpencil the dirty linen was leaked by some rogue insider. Can't find it anymore. ET and Emirates are actually profitable so nationalizing is not the blue pill. That only transfers control to more incompetent hands. Safaricom or Equity has made it by hiring global talent. KQ would benefit if politics and the national pride crap is shoved aside. It is a BUSINESS - what is "national" about it? That kind of BS killed Uchumi. Kenya does not need a state airline.

[Georgesoros]

Parkerpencil the dirty linen was leaked by some rogue insider. Can't find it anymore. ET and Emirates are actually profitable so nationalizing is not the blue pill. That only transfers control to more incompetent hands. Safaricom or Equity has made it by hiring global talent. KQ would benefit if politics and the national pride crap is shoved aside. It is a BUSINESS - what is "national" about it? That kind of BS killed Uchumi. Kenya does not need a state airline.

I completely agree with you!
Had Ichumi gone or completely sold that money could have been used to do something else. KQ hired incompetent decision makers therefore digging its own grave. Sell and move on

[Nefertiti]

I completely agree with you!
Had Ichumi gone or completely sold that money could have been used to do something else. KQ hired incompetent decision makers therefore digging its own grave. Sell and move on

Sadly they're still fumbling with toothless bulldog MJ. The old geezer is a startup builder - great with big cashflow expansionist business. KQ needs a TURNAROUND expert - even if not from airline. Safaricom and MJ is the opposite of KQ. But the Polish boy is ok - run a few low-cost airlines. MJ and his board seem unable to shield him from politics. Turnaround is optimization - squeezing the last penny - not expansion.

[Nefertiti]

British airline & travel company Thomas Cook goes burst. US$ 1.6B  in debt. It is tough times for travel business and only the smart and nimble will survive.


British travel firm Thomas Cook collapses, stranding 600,000 people abroad
PUBLISHED SUN, SEP 22 2019  9:45 PM EDTUPDATED MON, SEP 23 2019  10:39 AM EDT


A woman looks at holidays for sale in a Thomas Cook travel agent window in Bristol, England.
Getty Images

https://www.cnbc.com/2019/09/23/british-travel-firm-thomas-cook-collapses-stranding-travelers.html

[Nefertiti]

Airline is similar to insurance or retail- hawking antiques that have zero differentiation. Rock-bottom tickets will knock them out until disruption delivers the final blow. There is nothing like perfect competition - because it leads to death - that is in fact antiquated economics. The incumbents are stripped to the bone and cannot innovate nor make new investments. So they die. Supersonic jets will soon take over.