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The Nairobian

Job, salary cuts loom as Kenya Airways struggles to remain afloat

Business

By Dominic Omondi | Mar 09, 2016

Hundreds of employees of Kenya Airways (KQ) are staring at job losses as management seeks to turn around the fortunes of the struggling national carrier.

The airline, which recently reported a jaw-breaking full-year loss of Sh25.7 billion, is today expected to hold a board meeting to discuss pay cut option or further retrenchment. Also on the agenda is a major shake-up targeting at cutting operation costs.

Various sources at the airline told The Standard that the meeting will deliberate on a number of recommendations aimed at helping the firm bounce back. A similar board meeting will be held on Thursday as the management burns the mid-night oil to find ways of bringing the firm back to profitability.

When contacted, Kenya Airways management confirmed that retrenchment and pay cuts were part of the options as the national carrier moves to cut costs.

"As part of the airline turnaround strategy, all options are on the table. We acknowledge the need to significantly reduce our cost base in all areas. For personnel cost, we will discuss with all the staff and unions where appropriate to find the best solution," said ‎Human Resource Director Alban Mwendar.

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He said pay cut is one of the options but it is not the preferred one.

"All staff will be consulted before any decisions are made," said ‎Mr Mwendar. However, Mwendar refuted claims that some employees had already taken up a pay cut noting that it was still under discussion.

"Junior staff are unionisable and no discussions have yet been held with the unions. The junior staff terms and conditions of service cannot be altered until after negotiations and agreement with the unions," he said.

He also said management staff have contracts that cannot be altered until consultations have been held and they are on board. However, Mwendar refused to divulge how much KQ expects to save from this exercise.

*Kenya Airways (KQ) Human Resource Director Alban Mwendar.* *Hundreds of employees of Kenya Airways (KQ) are staring at job losses as management seeks to turn around the fortunes of the struggling national carrier.* (PHOTO: COURTESY)

A cabin crew member who also spoke to The Standard on condition of anonymity said that he had since accepted a pay cut as "he had no other choice."

It was not immediately clear by what fraction the salaries were being reduced. However, some sources said the pay-cut can go as deep as 50 per cent of the employees' salary.

The source noted that as has been common in the recent months, February's salary was delayed. However, unlike in the other months, this time round there was no communication to explain the reasons for delay.

Employees in the H9 job group, mostly junior staff, were finally paid on March 4. However, those in job group H10 who fall under the management group did not get their pay as they refused to take a pay cut.

The source said many junior staff opted for a pay cut as opposed to being sent home. Those in management, however, refused to have their pay slashed.

Captain Paul Gichinga, the Chief Executive of the Kenya Airline Pilots Association said that pilots had not received offers for pay cuts.

"There is no pay cut that has been offered to KQ pilots. I am shocked by such news, we have not received such an offer to discuss," he said.

However, Gichinga said that given that the airline has disposed of a number of aircraft, job cuts seemed inevitable.

The airline's management recently said it would enter into an agreement with Omni Air International for the sale of two Boeing 777-200 ER aircraft.