#8

Michael Joseph, EBS

BOARD CHAIR – KENYA AIRWAYS PLC

South African business mogul Michael Joseph is currently Chair of the Kenya Airways (KQ) Board, a position he has held since October 2016.

Headquartered in Nairobi, Kenya Airways is the country’s national carrier operating domestic, regional and international flights to destinations in Africa, the Middle East, Asia, Europe and the United States of America (USA). The company was founded in 1977, following the cessation of East African Airways, and is listed on the Nairobi Securities Exchange (NSE).

The global economy continues to endure the consequences caused by the war between Russia and Ukraine one year on. This war generated the biggest energy price shocks since the 1970s, along with more inflation and economic uncertainties.

The aviation sector, which is still reeling under the effects of the Covid-19 pandemic, has not been spared either, due mainly to massive increases in fuel costs. In 2022, fuel costs alone increased by 160 percent year-on-year, yet fuel accounts for 66 percent of KQ’s direct operating costs, thereby increasing direct operating costs by a whopping 94 percent.

Of note, KQ’s total revenue increased by 66 percent to KES 117 billion in the year under review, with capacity deployed measured in Available Seat Kilometres (ASKs), increasing by 75 percent, closing at 10,303 million, compared to 5,900 million in 2021.

Overheads increased by 30 percent, due mainly to foreign currency losses driven by the weakening of the Kenyan shilling against major world currencies. Despite these revenue and cost dynamics, KQ’s operating loss improved by 19 percent in 2022, to report a loss of KES 5.6 billion. This confirms that the airline would have achieved a break-even profit before tax and reported a net profit of KES 13 billion at operational level, if it were not for the negative global financial and operating dynamics. This translates that KQ, as it stands today, is a viable business and that the initiatives put in place by both the board, led by Michael Joseph, and management led by Allan Kilavuka, are finally bearing fruit. The significant improvement in the operating performance augurs well for the future profitability of KQ.

With a multitude of years of experience in management and leadership, Michael has been manoeuvring the choppy waters, and steering KQ towards a transformation before returning to profitability. One of the strategies is the intent on creating a pan-African airline, in a partnership framework with South African Airways (SAA). KQ is already ferrying cargo on behalf of SAA, in most of the southern Africa countries, as part of the deal.

Furthermore, in January 2023, the cargo division of KQ and Astral Aviation, another major air cargo carrier in Africa, inked a codeshare agreement which is expected to support air trade flows between Africa and the Middle East. KQ will put its codeshare flight numbers on Astral Aviation flights operating from Dubai in the United Arab Emirates (UAE) into both carriers’ hubs at Jomo Kenyatta International Airport (JKIA), Nairobi. The codeshare builds on the previous long-standing cooperation between the two airfreight carriers, and is sure to drive sustainable development.

In the last one year, KQ has included two new routes: Accra (Ghana) to Dakar (Senegal), and Mombasa (Kenya) to Dubai (UAE), to its network. The two additions serve to conveniently connect businessmen, traders, and tourists to different parts of Africa and beyond.

Focused on accomplishing a complete turn-around, KQ is implementing a raft of debt restructuring, operational and lease cost-cutting, operational excellence, customer obsession, heightened employee experience and diversification measures. As of now, the airline has successfully negotiated 22 percent lease cost reduction (approximately KES 4 billion), and by 2024, it hopes to have reduced operational costs by 10 percent. 

Under Michael’s chairmanship, KQ received the following 2022 World Travel Awards: Africa’s Leading Airline 2022; Africa’s Leading Airline Brand; Africa’s Leading Airline Business Class; and Africa’s Leading Inflight magazine, popularly known as Msafiri.

Joseph has been the recipient of many accolades, including CEO of the year awarded by the Kenya Institute of Management (KIM) and the Elder of the Order of the Burning Spear (EBS) awarded by HE the President of Kenya for his outstanding service to Kenya.

He is keen on environmental and wildlife conservancy, and currently serves as Chairman of the Lewa Conservancy. In addition, he sits on the boards of other strategic institutions.