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Broke pilots 'forced to skip meals' want airline dissolved

By Macharia Kamau | July 12th 2020

A story is told of a director of a local airline who was so angered by his pilots demands that he dismissively branded them ‘prima donnas’.

Pilots have been known globally to ground airlines if their most feeble demands are not met by managers.

The national carrier, Kenya Airways (KQ), has had its fair share of fights with its pilots. Their demands are almost always met, even when in instances they cede ground and settle for less.

If pilots of big carriers like KQ are treated with kids gloves by their managers, then the opposite is true for those employed by smaller airlines.

Such an assertion can be sufficed by a row that has been simmering between DAC Aviation, a small airline, and its pilots.

The dispute is threatening to bring down the Wilson Airport-based carrier, which has been servicing major contracts across African countries including delivering essential goods and personnel for United Nations agencies.

Correspondence between the airline and its pilots paints a picture of struggling employees who have to endure months without pay, and have to keep fighting off people they owe money.

The pilots want DAC Aviation liquidated so that they recover their money. Some ten pilots have made a statutory demand – in-line with the Insolvency Act – requiring the company to pay salary arrears totalling Sh15.28 million (Sh3.76 million in local currency and another Sh11.52 million ($107 780) in US Dollars.

One of the pilots with the airline said there are more than hundred pilots, crew and ground handlers who are suffering but have shied from taking on the carrier.

They are are afraid of repercussions not just from DAC, but also from other airlines based at Wilson, who might be reluctant to engage them in future if they learn of their antagonistic behaviour with their current employer.

“The sum of Sh3.76 million plus the sum of $107,780 claimed by them cumulatively as being the amount due to them through and by their service contracts as by the date aforementioned,” said the pilots in June 5 through their lawyers Muumbi and Co Advocates.

“Take notice that within 21 days after service of this notice on you… you must pay to the following creditors (list of pilots) … failure to pay the afore-stated amount shall result in the above creditors applying filing for a liquidation order against your company and all other legal actions consequent thereto.”

They would later in June 2020 gazette their intention to institute liquidation proceedings against DAC Aviation to recover the money owed to them.

 DAC’s pilots could be in financial trouble, at least going by correspondence between them and their employer seen by The Sunday Standard.

In November last year, a team deployed to Mali wrote to the Director of Operations in Nairobi notifying him that they would down their tools due to delayed salaries.

Other than the bed and breakfast that the firm was paying for its employees servicing a contract for the European Commission for Humanitarian AID (ECHO), the employees complained of failure by the firm to pay them subsistence allowances.

Without regular pay and allowances, and in a foreign country, the pilots narrated how they have struggled to choose between eating either lunch or supper.

In the email sent out by one of them, the pilots noted that their families back in Nairobi are enduring financial hardships and continue to pile up debts. Their medical cover, too was not up to date, and family members had to pay cash in hospitals.

“Couples are fighting over the phone over money,” said John Kavulu one of the pilots who had been deployed to Mali in an email to Ramesh Peshavaria the Director of Operations.

“We will deliver the C-208s planes to Bamako for maintenance on Saturday November 16… once in Bamako, the entire Mali team has decided that we will not be operating until we are paid our full September and October salaries.”

In another correspondence, a pilot complains that he was denied leave during which he had planned to go and sell his car to sort out some of his debts

Another pilot noted the duress he was under owing to lengthy delays in processing his pay, noting that the airline was driving him to a point where he could not fly safely.

“I have worked a whole year without leave…  I have not been paid (arrears) for 10 months amounting to $24,200 (Sh2.4 million). I have not been given full salary for the last three months amounting to $6,000 (Sh636,000),” said Stevenson Kibara in an email to human resource office in Nairobi on January 8, 2020.

“I have alerted the company that I cannot continue to operate under these conditions due to stress and fatigue and wish to stop operating immediately and stop placing the lives of my fellow crew and clients in jeopardy.”

Captain Kibara would go on to quit employment on March 3.

Different pilots wrote to management pointing out the heavy stress levels the teams were under, making it risky to operate aircrafts.

The correspondence with the pilots is littered with such statements as “team is cranky… and worst of all, our employer does not have the courtesy to address us over these issues” and “we have been working with crew that is stressed and fatigued making the aircraft hazardous to both the safety of crew and client”.

A number of pilots have since quit the airline after what they said was failure by the company to address their concerns.

They left the firm in a dicey situation where it could not find immediate replacements and in turn, failed to meet its end of the agreements it had with the major humanitarian organisations.

This has come at a heavy cost for the firm, which cited a revenue loss of $2.5 million (Sh265 million) from the European Commission for Humanitarian Aid (ECHO) and $800 000 (Sh82.4 million) from WFP.

On Friday last week, engineers too threatened to down their tools. The director of maintenance for DAC AMO (Approved Maintenance Organisation) told his engineers to go home until they are paid.

The engineers also want the Kenya Civil Aviation Authority (KCAA) to revoke the licence of DAC’s AMO for failure to pay them. Such licences are given to airlines to service their aircraft.

The firm said it is partly unable to pay salaries owing to this revenue loss, which it directly blamed on the pilots, noting that had they been on duty as required, the firm would have made money and met its obligations to them.

In an affidavit filed in court fighting the liquidation proceedings, Fredrick Opot, Chief Executive DAC Aviation, accused the pilots of abandoning their work stations and in several instances, leaving DAC Aviation’s clients stranded, actions that resulted in contract cancellation and subsequent revenue loss.

“Their singular actions have economically sabotaged the applicant’s (DAC Aviation’s) financial position,” said Mr Opot.

The airline also said the amount of money that the pilots are seeking from the company has been exaggerated and should first be decided by the Employment and Labour Court.

“The debts specified in the statutory demand are disputed by the applicant (DAC Aviation) on substantial grounds including the fact that they are excessive and unproven and that they are claims tied to heavy financial losses borne by the applicant,” said Clive Mshweshwe the DAC Aviation lawyer in documents filed in court on June 30.

“This was as a result of serious breaches by each of respondent (pilots) of their individual contracts which are matters that ought first to be adjudicated by the Employment and Labour Court.”

He continued: “Being that the current financial strain being experienced by the applicant (DAC Aviation) has been significantly and directly contributed by the said respondents (pilots), the intended action by the respondents is demonstrably made in bad faith and calculated to embarrass the applicant contrary to the principle of the Insolvency Act which is intended to allow a company… whose financial position is clearly healthy to continue to operate as a going concern so that ultimately it may be able to meets its financial obligations to its creditors in full or at least to the satisfaction of those creditors.”

Employee obligations

The documents filed in court further say that before February 2020, DAC Aviation had strived to meet all its obligations to its employees, although noting that there are instances where there were delays.

It further said the coronavirus pandemic has had a heavy toll on the company. The firm, however, said it is keen to settle all the money owed to pilots and other creditors.

“Operations were significantly affected by the imposition of Covid-19 travel restrictions in the aviation industry in Kenya and all the other counties in which the company operates, which in turn has negatively affected the company’s cash flow. This is a factor well beyond the company’s control,” Noted Mr Mshweshwe.

“Its intention to meet the debts once its financial position improves upon lifting of the restrictions is clear. The respondents – pilots – are well aware of the challenges being faced by the aviation industry and therefore their current actions are unreasonable and unwarranted.”

DAC Aviation Kenya is affiliated to DAC Aviation of Canada. Ownership records at the registrar of companies show that Emmanuel Anassis owns a single share in the Kenyan outfit, while Canada-based DAC Aviation International owns 999 shares.

Kenya Revenue Authority last year said it had opened a tax assessment of DAC Aviation’s operations with a view to determining “suspected profit shifting through creative accounting.”

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