Category Archives: KLM

Kenya Airways Restructuring Update

Yesterday Kenya Airways had a press conference with new Chairman Michael Joseph and outgoing CEO Mbuvi Ngunze. They spoke of restructuring changes happening at the company some of which included:

  • CEO search: Kenya Airways has listed between 15 and 18 candidates for CEO position, from all over the world. Shortlist will be 3-4 for final interviews (Via @wgkantai)
  • Challenges with staff. During the restructuring, some engineers have left KQ to work for Middle-East carriers. Crucially, the Chairman now seems to agree with the CEO on the need to revisit talks with the pilots union and to enhance staff productivity during the restructuring.
  • The contract with Mckinsey consulting is being wound down. It had been criticized for being very expensive. Many of the restructuring initiatives under the airline’s Operation Pride for revenue generation and cost saving were formulated by KQ staff and are being implemented by KQ staff, and hence the consultants’ time is over. Mr. Joseph said that this restructuring plan is now 55% complete.
  • KLM partnership:  The chairman defended the joint venture between KLM and KQ which some of the airline’s critics, especially its pilots, a claim was to the airline’s disadvantage. “Right now KLM is the best partner for us in terms of the route structure. The benefit is to KQ because KLM flies more routes and sells more tickets. We get revenues from the countries we don’t fly to into the joint venture. In the end, we benefit
  • The Chief Executive of KLM resigned from the KQ board and was replaced by Jos Veenstra who is a chartered accountant and is currently the VP Mergers Acquisitions and Holdings for Air France/KLM, and who has ben alternate director at KQ. It does not appear to be related with the restructuring. (via Capital FM)

What’s Your Travel Dream?

I’ve been invited to write about KLM dream deals, a selection of low fares that the airline for both their economy and business class travellers. From Nairobi, KLM serves over 460 destinations over the world. i.e Kenyans can click and pay for tickets to travel to far-reaching parts of the world.

What motivates one to travel? Usually, it’s work. Or to attend a conference or course, or to conclude a business deal. Sometimes it’s to attend university or (I hope not) for medical treatment.

But people also have dreams, of things that they want to do and places that they want to visit in life. These include entertainment, historical, fun, or interesting places.  Did you envy seeing your friends watching the rugby world cup at Twickenham? Or your parents visited biblical sites in Israel last Christmas? You may aspire to see ancient Greece or to attend mass at the Vatican, and you should one day.

At a seminar this week, financial consultant  Waceke Nduati, founder of Centonomy, answered the question – what would you advise your younger-self? Her answer was to spend your money on the things you care about. Travel is not pricey once you decide and plan and save for it. Waceke also cited how simple savings can affect one’s life – and if you consider that the Kshs 300 ($3) that many young working people in Nairobi spend for lunch every day, can add up to almost Kshs 100,000 ($1,000) at year-end which they can then use to pay for something that they dream of doing like education or travel.

So, if you work hard, save your money, and plan, such as with KLM Dream Deals, then you should get to fulfil your lifelong travel dreams. I’ve always been fascinated by the Kennedy assassination and I plan to one day visit Dealey Plaza, in Dallas Texas, to solve the mystery.

What’s your travel dream?

Understanding the KQ & KLM Partnership

 The IFC-led privatization of Kenya Airways (KQ) in which KLM became a strategic partner, and shareholder, in the airline,  purchasing 26% of the Kenya government’s shares in the airline for US$26 million, and after which the shares of the company were listed in an IPO, was celebrated as one of the most significant privatization deals for a decade, until Kengen and Safaricom.

But that’s all in question with the recent loss announced by Kenya Airways with quite a bit of blame being directed at KLM for the position in which the KQ finds itself in. What does this entail?

A master cooperation agreement and shareholders agreement were signed between KLM and KQ in 1995, and a codeshare agreement and joint venture agreement followed in 1997.

KLM has seats on the board of Kenya Airways and some of the tenets of master cooperation agreement give any KLM director veto power over KQ decisions on:

IFC celebrates KLM's investment in KQ

IFC celebrates KLM’s investment in KQ

  • The appointment or dismissal of the Managing Director or Finance Director of KQ
  • The acquisition or disposal of any aircraft and any other variation in the size and composition of  KQ’s fleet. (KQ’s 2012 rights issue IM notes that following the approval of a 10 year business plan in July 2011,  KQ’s management embarked on implementing the strategic initiatives for the first five-year period. In particular, the Business Plan envisaged that KQ will acquire 46 aircraft over the period to March 2016.) 
  • The allotment and issue of any shares
  • Entering into of any co-operation agreement with an airline that is a major competitor of KLM.
  • Material alteration KQ’s existing route network or material increase or reduction in the capacity on its routes
  • Material commitment or expenditure on sales and marketing or distribution of KQ’s products and services
  • Any sale of shares by the Government of Kenya to a major international airline.

Other notes from the IM and media

Global ticketing: In 2010, Kenya Airways became a full global airline partner of the SkyTeam global airline alliance, alongside KLM, having been an associate partner since 2007. KQ is currently the only SkyTeam member with significant operations in Africa.  With 14 SkyTeam member airlines, KQ’s passengers can take up to approximately 14,000 daily flights to 926 destinations in 173 countries. (So KLM helped KQ join? Will a break from KLM mean a break from Skyteam?).

Freight: In support of KQ’s expansion into freighter operations through the launch of a dedicated freighter business, the Board of Directors approved the acquisition of 12 freighter aircraft. In February 2012, KQ introduced its first dedicated cargo aircraft, a Boeing 747-400F, to be operated in association with KLM and which was expected to fly twice weekly between Guangzhou, Nairobi and Lagos.

Passengers: This translated article hails Kenya Airways as being a jewel in the crown of KLM:  “The investment by KLM Kenya Airways is one that works out well for both parties. Both companies fly each day between Amsterdam and Nairobi which there is a double daily connection..collectively the route has about one million passengers transported per year..

The cooperation agreement was expanded in November 2013: ..the collaboration was extended with the new routes London-Nairobi, Amsterdam-Entebbe / Kigali, Amsterdam-Lusaka-Harare and Amsterdam, and the Amsterdam-Kilimanjaro / Dar es Salaam. Kenya Airways and KLM jointly total around 44 weekly flights with a total turnover of over US$500 million.

However, this week, the KQ CEO said that the “In the context of the revenues and the costs on the routes in the joint agreement venture which we share 50-50, over the last three years, the route has been loss making,” ..and he said the Dutch Airline had since paid them a settlement transaction. 

EDIT (2018) From the KLM 2018 annual report to shareholders:  Following a debt and equity restructuring of Kenya Airways Ltd., the Group’s stake decreased from 26.73% as at December 31, 2016 to 7.76% as at December 31, 2017 and the Group lost its ability to exercise significant influence on Kenya Airways in November 2017.

Consequently, Kenya Airways is not an associate anymore and has become a financial asset in 2017. Following the implementation of IFRS 9 as per January 1, 2018, Kenya Airways has been included at fair value through other comprehensive income. There have been no changes in the Group’s stake in Kenya Airways in 2018. 

EDIT December 19 2020: Kenya Airways and Air France KLM Group have mutually agreed to terminate their Africa Europe Joint Venture Cooperation from September 2021 which had been suspended during 2020 over Covid-19.

Kenya Airways will continue to serve the Europe market through its gateways of London, Paris, Amsterdam with Rome slated for resumption from 2021. These routes will be served by onward codeshares from the Air France KLM group and additionally with our ever-expanding network of European carriers including Alitalia, British Airways, Lufthansa, and Swiss International Airlines amongst others.

End for Loki?

The Financial Times newspaper notes that peace in Sudan could mean that the massive humanitarian operations that have sustained Lokichoggio for almost 20 years will move on to Rumbek, Sudan.

Compe for KQ
From November, KLM Royal Dutch Airline will start direct flights from Entebbe to Amsterdam – a decision that was prompted by Uganda’s booming economy, stability, and growing demand for passenger services.

Debt relief
The municipal council of Nakuru has announced a debt waiver of all interest and penalties for a period of one month ending November 25th for defaulters to pay their outstanding rates. Also, the Nairobi city council has extended a similar waiver on its controversial land rates provided that those who have taken the council to court, also settle court charges incurred by the council.

Uchumi Loss
Uchumi announced a 1.22 billion shilling loss for the year (ended June 30 2005) which was almost twice as bad as the 699 million loss in 2004. Net sales reduced from 9 billion to 5.2b, but the company was able to reduce both its cost of sales, from 6.8b to 4.4b and operating costs from 2 to 1.8b. The company will use the 1.2 billion shillings raised from the recent rights issue to improve stocks, refurbish stores and carry out marketing activities.

New cement factory
East African Portland Cement Company has announced plans to build an $11 million factory without raising money from the capital markets. This same strategy of expanding while using financing from business proceeds is one of the factors that contributed to the problems at Uchumi.


Audit & risk advisory services manager: At KPMG International who will provide corporate finance and transaction advisory services to corporate clients in the Eastern Africa region and will administer and manage a diverse portfolio of clients, billing and collecting from them for assignments and projects undertaken. – The actual position will be consumer & industrial markets manager within the audit and risk advisory service department. Applicants should be college graduates (w/honours) with an accepted professional qualification (CPA, ACCA, CPA), 4 years audit or related experience, knowledge of accounting standards, IFRS, business factors and sector development, and who have excellent communication, team and IT skills. Apply by Nov 8 to the human resource manager at

Chief internal auditor Ref .CIA 10/05: At the New Kenya Co-operative Creameries – who will ensure that organizations operations are in compliance with company rules and regulations, produce timely internal audit reports, liaise with external auditors and review bus process to ensure efficiency and effectiveness. Applicants should be university graduates who are also fully qualified accountants – CPA (K) or equivalent, and have held similar positions for 3 years, preferably in a manufacturing organization. They should also have excellent IT, operational, people communication, audit and planning skills. Apply to the human resource manger, New KCC, P O Box 30131-00100 Nairobi by November 10.

Commercial project manager: finance & business administration: At Siemens ltd who will be in charge of project administration (defining processes, local & foreign purchasing and supervision of suppliers & subcontractors), accounting, reporting (deal with banking, accounting & taxation) as well as controlling and logistics management matters. Applicants should have an MBA, business administration experience, an entrepreneurial flair and 3 – 5 years experience in project management with an international company. Apply to the human resource manager, Siemens Ltd, P O Box 50861-00200 Nairobi by November 9.

Accountants: At the KEMRI/CGMRC Welcome Trust research programme who will prepare accounting and financial management information to control programme expenditure at Kilifi, Mombasa. Applicants should have a business degree, at least CPA part II, preferably with some experience in government or NGO accounting and familiarity with PASTEL software. Email applications by November 10 to for interviews in late November.

Audit managers: Chege Muchunguzi Mwangi & Company, Certified Public Accountants are seeking to hire an (i) audit manager and (ii) assistant audit manager. Applicants must be university graduates (accounts/finance) with CPA or ACCA and at least 5 years hands on experience. They must also be proficient in IAS and IFRS and be over 30 years old. E-mail applications to by November 7.

Training opportunity

A three-month course in investment banking will be offered by Dyer & Blair Investment Bank – beginning on November 7th at their offices with classes running from 5:30 to 8:30 PM. Students will learn investment banking, securities valuation, macroeconomic analysis, financial accounting, marketing, sales & customer care in securities industry, and forecasting of interest rates.

Those wishing to enroll should have bachelor’s degrees or professional qualifications (e.g. CFA/ CPA/CPS/AKIB/ACIB), and have a keen interest in financial markets. They should send in their application letters, with CV’s, to by October 29th – and only those shortlisted via a first come, first served and merit basis will be contacted. Costs are Kshs. 100,000 ($1,370) per trainee and successful students may be considered for employment by Dyer & Blair after the course.

Leaving at the Top

Mr Isaac Omolo Okero will step down as Chairman of the Board of the Kenya Airways Group at the airline’s annual general meeting on August 12 2005.

He has steered the airline which has grown and expanded to unimaginable heights after a few rocky years as it tried to shed its parastatal management and outlook from which it emerged as one of Africa’s leading airlines, winner of multiple awards, and a model for privatization in Kenya.

Of course, the last time he was up for re-election in 2003, he was not the favoured candidate of the new government, who voted for Joe Wanjui. However, KLM voted for former Central Bank Governor Micah Cheserem, and also for Okero, who then continued as Chairman. The race is on for his replacement, and we’ll see if it again pits the government against KLM.