National carrier Kenya Airways has ventured into the training industry as it makes moves to cut its expenditure on staff improvement in an effort to boost its profitability.
The training centre dubbed ‘The Pride Centre’ will train accident investigators, air cargo handlers and ground handling crew.
Kenya Airways is looking at cutting its training expenses and earn additional revenues from training staff from rival airlines and high school graduates.
This will help cushion the firm’s earnings from the losses emanating from transporting cargo and passenger numbers, hard hit by the global economic recession that pushed its operating profits eight per cent down to Sh162 million in the first half ended September 2009.
Kenya Airways is also hoping to trim its training budget by at least 40 per cent, though a small component of its total costs, its crucial given that the national carrier is looking at saving every shilling to soften the rising operational costs brought home by prices of fuel, overheads and fleet ownership costs.
The costs savings will also trickle down to trainees and other regional airline staffers, who have preferred to travel to Geneva and other destinations mainly in Europe, Asia, and North America.
The airline acquired the Pride Centre in 2005 at a cost of Sh360 million and refurbished it with an eye on rival airline training budgets at a time when players in the sector have placed a premium on quality human resources.
The increased demand for the crew in the past few years, especially by Middle Eastern airlines, has ushered in a wave of staff poaching which seen the airlines such as Kenya Airways loose a number of its staff to the monied airlines.
“The training centre is a good initiative since we shall get more local skilled personnel because we are forced to send our staff abroad for training,” said Paul Antrobus, the operations director.
Various aviation colleges have been mushrooming in the recent past, but the industry say the students coming from this institution fail to meet the required standards.
However, Kenya Association of Air Operators chief executive Eutychus Waithaka expects this to change with the opening of Pride Centre, since the airline understands the human capital needs of the aviation business.
East Africa School of Aviation is the main player, a local affiliate of International Civil Aviation Organisation (ICAO) and a training facility authorised by the Kenya Civil Aviation Authority which acts as regulator and licences players in the aviation industry after they graduate from authorised college.
“We receive very many students who have been swindled in the mushrooming colleges but we can not certify them since they are not trained in an authorised college,” said Nyagaka Ouko, an aeronautical engineer at EASA.
The tuition fee depending on the course chosen ranges between Sh94,710 ($1,230) to Sh196,350 ($2,550) for courses which last from three to six months according to a press advert last week.
The airline plans to invest in a Boeing 737 simulator for its pilots in a bid to save on costs of training pilots abroad.
In addition the airline has approached Kenya Civil Aviation to certify cabin crew.
The training is school is emerging at a time when fuel cost volatility and revenue management are among the top challenges carriers are facing the world over.
Analysts say KQ’s performance will be largely dependent on the direction the petroleum prices will take and how quickly the US and European recover from the slump in the economy.
European traffic, which accounts for a significant portion of the airlines revenues, remained flat on account of slowing global economy, which has kept global travel at record lows.
The global economy is showing signs of a slow recovery, but the International Air Transport Association (IATA) expects recovery of the travel industry to be slower.
IATA expects airlines to lose $11 billion in 2009 and warned that with jet fuel prices on the rise, cash flows would continue being under pressure.
Previously it had said the airline sector would lose $4 billion in 2010 but revised the number upwards earlier in the year.
Though Kenya Airways is betting on opening more routes in Africa, which is still the airlines cash cow, it has to contend with rivals South African airlines and Ethiopia airline.