US company Seabury issues notice on KQ relaunch

Companies

US company Seabury issues notice on KQ relaunch


Michael Joseph, Chairman of Kenya Airways. FILE PHOTO | NMG

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Summary

  • The restructuring process to keep the struggling national airline afloat comes as part of a government bailout.
  • Kenya Airways brought in Seabury in early February to advise on financial restructuring and a recovery plan amid continued losses that have seen the company rely on state bailouts to keep operating.
  • Over the years, Seabury has been named by several airlines around the world, including Indian international airline Jet Airways, German Air Berlin, Norwegian Air Shuttle, among others.

US consultancy Seabury Consulting has launched its consultancy assignment on Kenya Airways’ financial restructuring and recovery plan #ticker:KQ under a contract expected to last six months.

The restructuring process to keep the struggling national airline afloat comes as part of a government bailout.

“They have started work but it is an ongoing mission with various deliverables along the way,” Kenya Airways Chairman Michael Joseph said in an interview with business daily.

“(They) have specific deadlines – it’s a six-month contract.”

Kenya Airways brought in Seabury in early February to advise on financial restructuring and a recovery plan amid continued losses that have seen the company rely on state bailouts to keep operating.

“They will help with the restructuring under the financial support of the national treasury,” Mr Joseph said.

Over the years, Seabury has been appointed by several airlines around the world including Indian international airline Jet Airways, German Air Berlin, Norwegian Air Shuttle among others where he has advised them on loss reduction , increasing revenues and restructuring their debt.

“Seabury Consulting, now part of Accenture, offers a unique range of aviation industry-specific expertise that complements Accenture’s global capabilities, solutions and services to help propel airlines into the future,” the company states on its website.

The appointment came at a time when Treasury Supplementary Estimates presented to Parliament indicated that KQ was among the parastatals due to receive a 26.5 billion shillings bailout.

The national carrier needs money to maintain aircraft on the ground, pay salaries and pay utility bills such as security, water, electricity and parking, as well as to mitigate the effects of the Covid-19 pandemic which has hurt global travel demand.

Without state aid, the airline risked running out of money in the near future as banks were uneasy about lending to African carriers.

The Treasury had originally planned to offer Kenya Airways 53.4 billion shillings in direct budget support in the financial year ending in June 2022 as well as the next in what would have made it the biggest bailout business of the country.

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