Kenya Airways requires corporate reform to return to profits - Pilots Union

30 Août 2020

Nairobi, Kenya, August 30 (Infosplusgabon) - Financially distressed Kenya Airways has been urged to revise its strategic growth plan in the wake of the global coronavirus (COVID-19) pandemic.

This will help the airline to expand its assets to take advantage of new markets created by the exit of two major airlines in Southern Africa, an association representing its pilots said here Sunday.

Kenya Airline Pilots Association General Secretary Murithi Nyaga said following the exit of the South African Airways and Air Mauritius, Kenya Airways should refocus its corporate policy on achieving growth in the aviation sector.

“Instead of downsizing, we propose a consultative and inclusive process to reposition Kenya Airways for growth. The global airline industry recovered from the 11 September 2001 and the 2008 global recession. A recovery from Covid-19 is possible if you engage us,” Murithi told reporters.

He said the airline should focus on effectively balancing the use of its assets, including ensuring effective operations, optimizing fleet equipment, crew schedules and route network to tap into the cargo market.

The pilots’ union also called on the airline to enhance operations to fill the gaps in the Airline industry following the exit of Air Mauritius and South Africa Airways.

Citing the example of Rwanda Air and Ethiopian Airways which have not laid off staff and remained profitable during the coronavirus pandemic, the pilots who addressed a joint press conference with the Confederation of Trade Unions (COTU), said Kenya Airways was led by an incompetent administration. “Five years ago, we were bigger than Ethiopian Airways. Who is now the pride of Africa. Interestingly enough, Jambojet has been expanding as KQ shrinks its business in the hope to grow. What an irony? At the same time, KQ has been turning away business during the Covid-19 pandemic when they need the most. Is it a deliberate motive,” Murithi said.

Kenya Airways (KQ) reported Ksh14.33bn net loss for the half year to June 2020 this week, bringing the airline's total losses over the last 7 years to Kshh108,050,000,000 (US$1 billion) even as the government moves forward with a nationalisation plan.

In 2014, with annual revenues at US$1 billion, KQ was the third largest firm in sales behind oil marketing firm Kenol Kobil and telecom firm Safaricom. However, the airline has been accused of spending most of its earnings on unsustainably high corporate pay while seeking to spend huge amounts on severance pay on job cuts.

The pilots said the airline should redeploy some of KQ's assets to facilitate pilot training, reduce costs, and meet the airline demands.

“We recommend the equitable representation of experts in the aviation sector on the boards and management of Kenya Airways in line with global airline best practices,” Murithi said. The pilots said they were dissatisfied with the excuses Kenya Airways had been propagating to justify job cuts, including pilots.

“We are cognizant of the effects of the Covid-19 pandemic on many Airlines across the world. We are also aware of how the pandemic has ravaged many jobs and affected the books. However, the scenario for Kenya Airways before the Covid-19 pandemic was and still is because of mismanagement of the Airline and it’s past poor leadership,” Murithi told reporters. Over the years, mismanagement, lack of business strategy, and poor leadership have driven this Airline to a financial crisis that has negatively affected its operations, and not as blamed for employee's wage bill, Murithi said.

The pilots’ union said the Airline had suffered high levels of incompetency exhibited in the board and management appointments.

Hinging on the need to layoff as a solution to save the Airline is a demonstration of a lack of business strategy instead of proper planning for the coming two years, the pilots union said.

At the same time, the management has never come out clearly to do a comparative analysis of pilot's salaries globally and paint the right picture, the pilots said.

“They have been demonizing pilots and giving us a bad name to gain public sympathy as they hide under the ‘wage bill’ banner,” the pilots said.

Comparing the industry data on other airlines' wage bills against turnover, the pilots said KQ wage bill was way below industry standards.

KQ's wage bill stood at approximately US$10 million every month, which translates to roughly US$130 million every year against a turnover of US$1.29 billion this year, which is 10 per cent of the turnover.

“The question would be how Kenya Airways is making such a huge loss when it is grossing second to leading blue-chip company in Kenya.

“The management has cleverly dominated the narrative by talking about pilots' salaries relative to the total wage bill and the wage bill in absolute terms.

"This is unfair when the majority of the staff at the National Airline continue to receive meager salaries,” the pilots stated.

FIN/ INFOSPLUSGABON/SDX/GABON2020

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