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Kenya Airways...why ignore..
Rank: Member Joined: 5/29/2016 Posts: 898 Location: Nairobi
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The Mckinsey billions Quote:According to a memorandum seen by The Standard on Sunday, the firm was to earn at least Sh1.7 billion in the first 18 months of the contract as standard costs alone. For the first three months, Kenya Airways (KQ) was to pay a fixed fee of $800,000 (Sh80 million) a month. This was to be charged twice a month, an arrangement that saw the airline part with at least Sh40 million every two weeks. This was to happen between mid-November 2015 until February 2016. Afterwards, it was to earn $1,500,000 (Sh150 million) every month for the next six months beginning March this year. It was then to scale it down to $500,000 (Sh50 million) a month for another 12 months. This brings the fixed charges to Sh1.7 billion in the first 18 months. In that period, there were to be other charges such as performance fees that were not explicitly defined in the contract and which were to be calculated based on other metrics such the value of initiatives executed.
“This fee will be charged twice a month at the beginning and mid of each month. These payments are immediately due,” the contract adds. The contract says that unless Kenya Airways had sufficient cash funds available for the whole time of their programme, the airline was to pay in advance. “All invoices are payable within 15 days of issue. These payment terms apply in case KQ is in stable financial condition; otherwise section ‘cash advances and prepayment’ is applicable,” the contract reads in part. Read more at: http://www.standardmedia...handed-mckinsey-billions
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Rank: Elder Joined: 6/23/2009 Posts: 14,318 Location: nairobi
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sparkly wrote:chiaroscuro wrote:obiero wrote:[quote=ArrestedDev]No recovery at sight. What is currently happening is the last nail in the coffin being hammered.A competent management should be put in place. There is no highly skilled employee who will seat back and relax in a workplace where there is no future. A political stooge like Ngunze can just seat and wait. Quote:KQ has suffered several flight delays recently.
"The declined investment in KQ particularly on maintenance of planes as a result of budget cuts is a recipe for disaster," said Consumer Federation of Kenya secretary general Stephen Mutoro.
"The matter is causing low morale among pilots because some are declining to fly some planes because of their poor conditions." http://www.the-star.co.k...new-probe-team_c1421567[/quote] The media has tried to kill KQ for over 5 years A company who's liabilities are higher than its assets is dead! You can't kill a dead company. KQ is simply on life-support - external forces are trying hard to keep it alive. KQ died three years ago! How dare you contradict @obiero? Almost 8 negative pieces in a span of just 3 days across all major dailies.. The media to a large extent is responsible for the continued harsh environment it creates for the KQ share.. Why doesnt the media digest improved operating profit at the airline, increasing efficiency, end of fuel hedges.. Ngunze is also not blameless here, I have tasked him to join twitter for aggressive visibility but the bugger is timid COOP, IMH, KEGN, KQ, MTNU
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Rank: Chief Joined: 1/3/2007 Posts: 18,371 Location: Nairobi
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Rank: Member Joined: 5/29/2016 Posts: 898 Location: Nairobi
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obiero wrote:sparkly wrote:chiaroscuro wrote:obiero wrote:[quote=ArrestedDev]No recovery at sight. What is currently happening is the last nail in the coffin being hammered.A competent management should be put in place. There is no highly skilled employee who will seat back and relax in a workplace where there is no future. A political stooge like Ngunze can just seat and wait. Quote:KQ has suffered several flight delays recently.
"The declined investment in KQ particularly on maintenance of planes as a result of budget cuts is a recipe for disaster," said Consumer Federation of Kenya secretary general Stephen Mutoro.
"The matter is causing low morale among pilots because some are declining to fly some planes because of their poor conditions." http://www.the-star.co.k...new-probe-team_c1421567[/quote] The media has tried to kill KQ for over 5 years A company who's liabilities are higher than its assets is dead! You can't kill a dead company. KQ is simply on life-support - external forces are trying hard to keep it alive. KQ died three years ago! How dare you contradict @obiero? Almost 8 negative pieces in a span of just 3 days across all major dailies.. The media to a large extent is responsible for the continued harsh environment it creates for the KQ share.. Why doesnt the media digest improved operating profit at the airline, increasing efficiency, end of fuel hedges.. Ngunze is also not blameless here, I have tasked him to join twitter for aggressive visibility but the bugger is timid Ngunze won't join twitter as he will be undressed. He is the cause of some of the problems bedeviling KQ right now. The contract that handed Mckinsey billions before even work started was executed by him and Alex. All the clauses highlighted in the Standard favours the consultant. The interest of the airline was not taken care of at all given that the cash flow situation was bad and in order to meet other critical obligations I would expect them to have critically looked at it.
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Rank: Member Joined: 2/8/2007 Posts: 808
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The operating profit pales in significance. For the accountants on the forum, some of the below the EBITDA items are so pertinent that it is subsuming to spend too much on operating profit.
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Rank: Elder Joined: 6/23/2009 Posts: 14,318 Location: nairobi
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Kausha wrote:The operating profit pales in significance. For the accountants on the forum, some of the below the EBITDA items are so pertinent that it is subsuming to spend too much on operating profit.  The finance costs plus forex revaluations are the only major items still standing in KQs path to profitability.. Hedging and other matters have been dealt with, firmly COOP, IMH, KEGN, KQ, MTNU
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Rank: Member Joined: 5/29/2016 Posts: 898 Location: Nairobi
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obiero wrote:Kausha wrote:The operating profit pales in significance. For the accountants on the forum, some of the below the EBITDA items are so pertinent that it is subsuming to spend too much on operating profit. The finance costs plus forex revaluations are the only major items still standing in KQs path to profitability.. Hedging and other matters have been dealt with, firmly Hedging still there up to March 2017 as well as those entered recently. The problems in KQ run deep as it has been said several times. There is no return to profitability in the foreseeable future. Quote:“This has been largely due to the flexibility of the new hedging plans we have entered into that have also seen their timelines reduced to between 12 and 24 months,” Mr Ngunze said, adding that the airline is expecting its expensive hedging contracts to end by March next year, allowing it to fully utilise the benefits of the low oil prices. http://www.theeastafrica...item-1-yuqnnn/index.html
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Rank: Member Joined: 2/8/2007 Posts: 808
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obiero wrote:Kausha wrote:The operating profit pales in significance. For the accountants on the forum, some of the below the EBITDA items are so pertinent that it is subsuming to spend too much on operating profit. The finance costs plus forex revaluations are the only major items still standing in KQs path to profitability.. Hedging and other matters have been dealt with, firmly @Obiero, who you can't cover your interest from operating profit i.e (-ve)ADSR you are in serious funk and profitability has to involve chopping the bleeding items above the line or sorting out the assets on the balance sheet. The way I understand airlines work is that for a given plane count you need a given head count. Unless HQ has too many warm bodies, KQ has to shrink the fleet significantly and routes so as to allow it to shrink the head count and ops. I don't see how else this will be done, forcing the income statement to produce enough operating profit to cover funding costs looks too onerous. Wonder why McKinsey is being paid.
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Rank: Member Joined: 5/29/2016 Posts: 898 Location: Nairobi
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Please register and vote for KQ - World best business class to shore up the ratings. https://www.worldtravelawards.com/vote
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Rank: Elder Joined: 6/23/2009 Posts: 14,318 Location: nairobi
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Already done COOP, IMH, KEGN, KQ, MTNU
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