Business
Kenya Airways CEO Titus Naikuni to step down – has succeeded in returning carrier to profitability
Titus Naikuni – CEO of Kenya Airways Ltd. PHOTO/File
(Bloomberg) – Kenya Airways Ltd. Chief Executive Officer Titus Naikuni will be stepping down after restoring sub-Saharan Africa’s No. 3 carrier to profit with cost cuts that outweighed the impact of the Westgate mall siege and a fire at its hub.
The Nairobi-based airline posted net income of 384 million shillings (US$4.4 million) in the 6 months to September 30, versus a year-earlier loss of 4.79 billion shillings (US$55 million), it said today in a statement. Sales rose 9 percent to 54.3 billion shillings (US$628 million).
Gains stemmed from “stabilization of euro-zone economies, favorable prices for jet fuel, a robust business environment and management focus on pruning loss-making operations,” Kenya Airways said. The August 7 Nairobi airport blaze hurt transit traffic and the Westgate terrorist attack 6 1/2 weeks later led to a further dip as governments advised against travel to Kenya.
Naikuni, who has led the carrier for more than a decade, had his contract extended by a year but will leave at the end of 2014, with the search underway for a successor, Chairman Evanson Mwaniki said today in Nairobi. The CEO added routes to Abu Dhabi, Malawi and Zambia in the first half while terminating services to Cairo, Burkina Faso, Gabon and the Central Africa Republic in response to weak demand.
Kenya Airways closed 4.5 percent higher at 14.05 shillings (US$0.16) as of 3 p.m. (7 a.m. EST) in Nairobi, the highest level in 15 months.
KLM partnership deal expanded
The stock has gained 23 percent this year, valuing the company at 21 billion shillings (US$266 million). Kenya Airways is worth 2 1/2 times what it was on the assumption of control by Naikuni (who turns 60 in 10 days) – in 2003, when he expanded the company with the purchase of a 49 percent stake in Tanzania’s Precision Air.
A code-sharing pact with the Air France-KLM Group is to be expanded, the CEO said today, with the European carrier’s KLM unit adding its code to Kenya Airways flights from Nairobi to London, Entebbe in Uganda, Kigali in Rwanda and the Zambian and Zimbabwean capitals Lusaka and Harare from January 1 2014.
