Kenya Airways wage bill rises as 300 get new terms

Riot police disperse Kenya Airways staff during a protest over pay at the Jomo Kenyatta International Airport in Nairobi in March. The airline hopes the new pay plan will minimise labour disputes. [File, Standard]
Struggling national carrier Kenya Airways has reviewed the terms of more than 300 of its employees, making them permanent and pensionable.

The move is seen as an attempt to foster better relations with its staff that are critical to its turnaround plan.

It has resulted in a 10 per cent increase in the number of its permanent employees while staff costs have gone up by 23 per cent.

It also means that the airline has reverted to its old system of hiring employees directly while cutting reliance on workforce supplied by contracted human resource firms.

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As part of cost-cutting initiatives, the airline had a few years ago adopted a policy where it would increasingly rely on employees engaged on renewable contracts as well as those supplied by third-party firms.

According to its annual report for the year to December 2018, the airline had 3,905 permanent staff, an increase of 357 employees compared to 3,548 on its payroll as of December 2017.

The number of contracted staff dropped 16.5 per cent to 858 compared to over 1,000 by the end of 2017.

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The airline said it had poached staff from companies that have been supplying it with the required human resource in a bid to improve relations with its partners.

“As at the end of this Financial Year 2018, Kenya Airways had a total headcount total of 4,763 staff employed across 39 countries. Permanent staff stood at 3,905 whereas contracted staff closed at 858. In the previous year 2017, permanent staff stood at 3,548 and contracted staff at 1,028,” said KQ in its annual report.

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“The increase in permanent staff of 10 per cent is mainly attributed to the movement of staff from the outsourced labour providers into Kenya Airways in a bid to improve employee engagement and motivation. In 2019, we will initiate new engagement strategies to build motivation and alignment to our corporate objectives.”

Total staff, both those hired on a permanent basis and on contract, increased to 4,763 in 2018 compared to 4,576 in 2017.

Hiring directly has now resulted in the airline’s staff costs go up to Sh1.3 billion per month in 2018, a 23 per cent jump from Sh1.05 billion per month that KQ had spent in 2017.

This would translate to Sh16.066 billion over a 12-month period last year and Sh9.48 billion over a nine-month reporting period in 2017.

The firm last year changed its financial reporting period to end in December as opposed to March to coincide with those of its partners.

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KQ had over the last decade adopted a model where it engaged outsourced staff for some of its functions in a bid to reduce staff costs as well as save management the pain of dealing with labour unions.

It was this strategy that saw the carrier rationalise its workforce with layoffs and their jobs outsourced to third-party suppliers.

Though still in the red, KQ cut losses to Sh7.5 billion in the year to December from Sh26.2 billion in 2016.

The pay plan comes at a time when Michael Joseph is seeking a fresh mandate to extend his tenure as the airline’s chairman.

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Kenya AirwaysKQ wage billKQ losses