Kenya Airways boss Mbuvi Ngunze to leave airline

Kenya Airways Chief Executive Officer, Mbuvi Ngunze, is set to exit the airline in the first quarter of 2017, according to the airline's management. This announcement has sparked various reactions and speculations within the market as the troubled airline seeks to turn its fortunes around. Ngunze's departure comes at a critical time for Kenya Airways, which has been grappling with a myriad of challenges ranging from high aircraft leasing costs to labor disputes. Samuel Gichohi, Head of Business Development at NIC Securities, weighed in on the development during a recent CNBC Africa interview. Gichohi noted that Ngunze's exit was long overdue, as the airline had not made significant strides in resolving its major issues under his leadership. He mentioned the expensive aircraft leasing deals and ongoing labor problems as key areas that needed addressing. Moreover, Gichohi stressed the importance of bringing in a new CEO with substantial airline experience who could steer the company in the right direction. He emphasized the need for a strategic overhaul and alignment with industry best practices to drive Kenya Airways' recovery. The announcement of Ngunze's departure has triggered speculation in the market, with investors closely monitoring the airline's stock performance. Gichohi explained that while there might be short-term fluctuations in Kenya Airways' share price, the focus should remain on the broader strategic changes that the company will undertake. He highlighted the significance of evaluating the new CEO's vision, the company's asset and capital structures, and overall operational strategy to gauge its long-term prospects. The market is likely to witness increased trading activity in Kenya Airways' stock following the news of Ngunze's impending exit. Gichohi pointed out that past instances of leadership changes at the company had resulted in temporary spikes in the share price, driven by investor optimism for a turnaround. For instance, when former CEO Michael Joseph assumed office, there was a notable increase in share value before tapering off. Despite these short-term market movements, Gichohi emphasized the importance of sustained operational improvements and financial stability for Kenya Airways' sustained growth. The airline recently reduced its losses by 60%, signaling progress in its restructuring efforts. The departure of Ngunze is seen as a pivotal moment for Kenya Airways, with the market eagerly awaiting the appointment of a new CEO and strategic direction for the company's future. As the aviation industry faces unprecedented challenges due to the ongoing COVID-19 pandemic, Kenya Airways must navigate this turbulent period with clear leadership and bold decisions to secure its position in the market. Investors, analysts, and stakeholders will closely monitor the airline's trajectory in the coming months to assess its turnaround prospects amid a rapidly evolving business landscape.