Companies

KQ withholds pilots pay in salary cuts standoff

KQ-cargo

A Kenya Airways cargo plane. FILE PHOTO | NMG

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Summary

  • National carrier Kenya Airways (KQ) has withheld the March salaries for its pilots who are demanding smaller pay cuts in the wake of business disruptions caused by the Covid-19 pandemic.
  • In a memo to the pilots last week, KQ director of operations Paul Njoroge said the pilots’ salaries for March would not be remitted until they dropped their demand for reduced cuts on their monthly take-home.

National carrier Kenya Airways (KQ) has withheld the March salaries for its pilots who are demanding smaller pay cuts in the wake of business disruptions caused by the Covid-19 pandemic.

In a memo to the pilots last week, KQ director of operations Paul Njoroge said the pilots’ salaries for March would not be remitted until they dropped their demand for reduced cuts on their monthly take-home.

KQ, whose net loss for the fiscal year ended December 2020 stood at Sh36.2 billion on the economic fallout of the pandemic, has opted to keep paying pilots 70 percent of their monthly pay, promising to clear the balance when the carrier returns to growth.

The Kenya Airline Pilots Association (Kalpa)— which represents about 414 KQ pilots—wants the airline to remit 95 per cent of the pay, with only five per cent deferred.

"Though management vividly explained to Kalpa the rationale of the proposed 70 per cent salary payout to pilots and sought consent for payment, Kalpa maintained that pilots should be paid salaries at 95 per cent and five per cent owed," Mr Njoroge said in the Thursday memo seen by the Business Daily.

"Based on our current financial position, pilots’ salaries shall be delayed until when we receive a consent that is affordable."

Monday, the pilots’ union confirmed that the pay impasse was yet to be settled and that it was seeking an improved proposal from KQ.

"Kalpa reiterates and simply proposes that the salary payout to members for March 2021 be equitable to other KQ employees. Your unilateral and coercive actions - on a matter that should be subject to negotiations - will not be entertained going forward," said Kalpa General Secretary Murithi Nyagah in a letter addressed to KQ’s chief human resource officer Evelyne Munyoki on Monday.

The union has frozen KQ plans to cut up to 207 of the 414 pilots on the carrier’s payroll last year over the next three years.

This has seen the pilots working for an average of 30 hours monthly compared to the legally set limit of 105 hours and normally acceptable productivity target of 72 hours following the coronavirus crisis that hit demand for travel.

KQ last year said the pilots account for 10 per cent of the airline’s total workforce, but take home the equivalent of 45 per cent of the overall pay to employees or Sh6.48 billion based on the carrier’s wage bill for the year to December.

This means that on average, a KQ pilot costs the company Sh1.3 million, which matches the salaries and allowances of top chief executives in the country.

KQ says that its pilots have been earning millions of shillings despite working less than a third of the legally set flying hours.

Although the pilots are currently being paid 70 per cent of their salaries due to Covid-induced pay cuts, they are technically on full pay because the airline is expected to settle the balance once it returns to growth.

The situation has been made complex by the fact that the Kalpa has resisted plans by KQ to cut up to 207 of the 414 pilots on the carrier’s payroll last year over the next three years.

Employees affiliated to Kenya Aviation Workers Union (KAWU) account for the majority of workforce at 65 per cent but take home an estimated 30.5 per cent of KQ’s payroll.

Managers at the airline are 22 per cent of the workforce and draw compensation equivalent of 22 per cent of the payroll costs.

In January, KQ workers were put on pay cuts to preserve cash amid unrelenting financial challenges due to the Covid-19 pandemic.

The airline’s chief executive Allan Kilavuka said the new cost-cutting measure that was targeting workers earning Sh45,000 and above was aimed at keeping the company afloat.

The payroll cuts of between five percent and 30 per cent took effect in January and were expected to remain for a period of between six to 12 months, with a quarterly review of the proposed pay variation.