Columnists
Handy tips for Kenya Airways in Japanese airline comeback
Wednesday May 12 2021
A Kenya Airways aircraft at JKIA. FILE PHOTO | NMG
Summary
- When it comes to corporate turnarounds, there’s none that shines like the Japan Airlines (JAL).
- Everything from its spectacular collapse in 2010, then its massive turnaround into one of the world’s most profitable carriers to its successful relisting is simply phenomenal.
- Interestingly, its story bears striking pre and post-crisis similarities to Kenya Airways (KQ) unfolding crisis story.
When it comes to corporate turnarounds, there’s none that shines like the Japan Airlines (JAL). Everything from its spectacular collapse in 2010, then its massive turnaround into one of the world’s most profitable carriers to its successful relisting is simply phenomenal.
Interestingly, its story bears striking pre and post-crisis similarities to Kenya Airways (KQ) unfolding crisis story. For instance, both suffered from poor financial management practices, ill-timed expansion strategies and crippling debt loads.
What’s interesting is that they all became publicly listed and then fell into insolvency within 10 years apart from each other. Expectedly, to deal with the crisis, all laid off staff, cut unprofitable routes, trimmed employee benefits and called for huge injection of public funds.
The only difference is that while one bounced back after two years, the other is still stuck in corporate restructuring confusion five years on. The question is; how did Inamori (the turnaround chief executive at JAL and founder at Kyocera) manage to do it?
First of all, corporate turnarounds are no kids play. It’s hard, folks. Really, really, hard. In fact, Inamori is reported to have declined the job offer several times before agreeing to join the airline.
Quick analysis of his efforts reveal three major points. One; re-ordering a company needs a powerful management…