× Business BUSINESS MOTORING SHIPPING & LOGISTICS DR PESA FINANCIAL STANDARD Digital News Videos Health & Science Lifestyle Opinion Education Columnists Moi Cabinets Arts & Culture Fact Check Podcasts E-Paper Lifestyle & Entertainment Nairobian Entertainment Eve Woman Travelog TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS
×

Kenya Airways CEO ties return to full pay on debt restructuring

NEWS
By Patrick Alushula | December 2nd 2021
By Patrick Alushula | December 2nd 2021
NEWS

Kenya Airways Chief Executive Allan Kilavuka. [David Njaaga, Standard]

Kenya Airways (KQ) Chief Executive Allan Kilavuka says reinstating full salaries for employees will depend on sustained revenue recovery and renegotiating debts with creditors.

He says the airline has seen an improvement in revenues but not enough to lift the current 30 per cent pay cuts as is being pushed by Kenya Airline Pilots Association (Kalpa).

Mr Kilavuka likened the airline’s current situation to a patient who is showing signs of moving from the intensive care unit (ICU) to high dependency unit (HDU) and must not be rushed “to go exercising”.

“Even I would like us to go back to full pay because I have never been paid my full salary since I joined the company,” the CEO said in an interview with Spice FM on Thursday.

“We need to survive, we need to get out of the ICU. Now is not the time to go exercising, it is the time to ensure we are being treated to move out of ICU to HDU. To do that, we need to conserve cash.”

The airline owed suppliers Sh31.55 billion by end of December last year while Sh102.53 billion was owed to lenders.

Kalpa’s call for return to full pay has come when domestic flights are at 90 per cent capacity while international ones are at 52 per cent - a stark difference from last year.

Kilavuka said going back to full pay requires balancing other obligations such as agreeing with suppliers and banks on how to restructure the debt still owed to them.

He said KQ has managed to pay 70 per cent of salaries because lenders have been “very gracious by deferring all the payments” on loans due.

The airline is negotiating with creditors so that the debt is restructured and afford KQ a repayment schedule that will not strangle operations.

“As revenue increases and we are able to negotiate with our lenders and suppliers, that will be a sweet spot. Covid-19 took a very bad situation and made it much worse,” said Kilavuka.

Share this story
Kenya's bumpy road to salvaging fisheries sector
Kenya has the potential of yielding 300,000 metric tonnes of fish worth Sh42 billion every year from the ocean.
Local SMEs to benefit from new enterprise hub
The Nairobi centre will serve as a platform to scale globally the most successful local and regional entrepreneurial initiatives.
.
RECOMMENDED NEWS
Feedback