Senate identifies five major causes of KQ losses

August 3, 2015
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Committee chairman, Kisumu Senator Anyang’ Nyong’o says this was after the committee held several meetings, including 2 public hearings, which is yet complete its work/file
Committee chairman, Kisumu Senator Anyang’ Nyong’o says this was after the committee held several meetings, including 2 public hearings, which is yet complete its work/file
NAIROBI, Kenya, Aug 3- A Select Committee established by the Senate to look into the crisis facing Kenya Airways, says it has discovered major reasons that has led to the airline’s massive losses in their preliminary report.

Committee chairman, Kisumu Senator Anyang’ Nyong’o says this was after the committee held several meetings, including two public hearings, which is yet complete its work.

Five major problems discovered by the committee include;
• Poor investments decisions by management of buying and leasing aircrafts, and fuel hedging, under arrangements which are not profitable to the company, thereby leading to sky rocketing indebtedness,
• Expensive ticketing which are non competitive in the market leading to loss of passengers as well as revenue,
• Routing arrangements and partnerships which may account for massive losses of revenue, particularly due to lack of expansion of KQ flights in the African routes,
• Problematic human resources policy and practices causing long drawn industrial unrest detrimental to establishing a healthy business environment in the company and,
• Frequent cancellation of flights causing inconvenience and poor relationship with passengers, who consequently abandon using the airline.

“Prima facie evidence so far gathered shows that the airline faces major problems which the committee is looking deeply into with management as well as other stakeholders,” Nyong’o said on Monday.

In 2015, Kenya Airways announced a net loss of Sh26billion, the highest in Kenyan corporate history.

READ: KQ flies into more turbulence with Sh25.7bn loss

Until now, investors and a majority of Kenyans are seeking answers as to why the management watched the only national airline fall, without seeking help.

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