Like his kinsmen, Titus Tukero Naikuni, outgoing group managing director and chief executive of Kenya Airways, hates standing still and has not stopped moving since taking the helm at the airline in February 2003. In the short period since, he has examined every aspect of the airline’s operation, sweeping away wastage and unprofitable activities and building a team in his own mould. The result is a carrier that ended its last financial year to March 2005 with positive results in every principal operational and financial measurement, making it Africa’s most profitable airline in terms of operating margin among the carriers ranked in the Airline Business annual financial rankings. Its remarkable progress continued in the first six months of the current financial year.
The greatest shock was felt among top management, which he cut by 50% and replaced five out of seven in crucial positions, while also redefining their roles. “The top had got it wrong,” he says, “not the bottom. I talked to staff at every level and told them how bad things were going and of the need for urgency in reversing the decline.” Not everyone within the airline welcomed the sharp wake-up call, and there was some resistance, although this was largely underground. However, the force for change he had unleashed had become so powerful, Naikuni says, that the resistance soon crumbled.
Naikuni was not deflected by pockets of criticism. His geniality and mild manner hides a steely edge, honed by years of toil within the Magadi Soda Company, where he worked his way up from when he joined as a trainee engineer in 1979 to managing director by 1995. A two-year secondment as permanent secretary in the Ministry of Information, Transport and Communications, with a wide range of responsibilities, further enhanced his profile. Those who know him well are keen to point out that in spite of having wielded the axe, his style is not dictatorial, rather more consultative and visionary. A notice in his office that says “none of us is as strong as all of us” gives some insight into his collective approach.
Naikuni initiated the Kenya Airways Turnaround Project, employing a consultancy as facilitator, which, together with 40 of Kenya Airways’ own staff at a lower level, started examining a number of projects identified by them. “I monitored progress very closely to ensure these were implemented,” he says, “and we delivered 80-85% of what we set out to do within 18 months. There were a lot of doubting Thomases who had said that this could not be done. But we proved otherwise.”
Stopping the wasteThe two main elements of the plan were to eliminate waste and increase revenues. “I don’t like talking about cutting costs,” Naikuni says, “there is nothing wrong with costs, it is wastage that is bad.”
Two subsidiaries stood out for their negative impact on the balance sheet – Flamingo Airlines and Kencargo. Flamingo Airlines had been set up in 2000 to provide feeder services from domestic points with a fleet of two Saab 340B turboprops. “When we started looking at wastage,” he continues, “we soon found that our domestic subsidiary with two small aircraft had a completely duplicated, monolithic structure with its own management and operational set-up. It was not surprising that it was losing money heavily.” Naikuni closed down Flamingo Airlines and merged domestic flights into the mainline operation, with the result that these now produce a small profit.
“Then we looked at Kencargo. This was a joint venture between Kenya Airways, KLM Cargo and Martinair and it started because when Kenya Airways was privatised, it had no experience in cargo. Initially it was a good idea to have such a subsidiary and it soon developed its own strength. However, it was not viewed as part of Kenya Airways, but as a separate organisation dominated by its two Dutch owners,” Naikuni observes. “We all agreed that the time had come to move out of Kencargo and set up KQ Cargo, which is now part of our own commercial department.” Since this took effect, cargo revenues have been growing by 30-40%, he says. Naikuni adds that Europe still accounts for the majority of its cargo business, but that there is an increasing emphasis on the Far East, especially China, which is moving into Africa in a big way, investing in the oil industry and trading electronic goods for fresh produce. Tourism into Africa from the East is also growing.
Gateway to the East.
“My vision is to fly to every capital in Africa. So people can fly wherever they want. We can’t fight poverty if Africans cannot travel. I would also like to see a time when Europe will make it easier for Africans to access the European Union.”
Clearly, Naikuni’s work is almost done at KQ, but already he can walk tall in the self-belief that while he leaves behind a legacy . Kenya Airways is the good news that Africa has been waiting for.
Courtesy of http://www.flightglobal.com
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