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Kenya Airways employees now demand full salary

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Kenya Airways CEO Allan Kilavuka. FILE PHOTO | NMG

Summary

  • In a memo addressed to KQ’s chief people officer Evelyne Munyoki, Kenya Airline Pilots Association (Kalpa) wants the airline to pay them full salaries, saying that the carrier has recorded improved performance in business in the last few months.
  • Kenya Airways chief executive Allan Kilavuka has however stood his ground saying that in as much as he is willing to restore workers’ pay to 100 percent in the near future, the airline is still bogged down with deferred payments to lenders and suppliers.

Kenya Airways (KQ) #ticker:KQ employees led by the pilots union have demanded the reinstatement of their salaries to 100 percent in the latest staff standoff at a time the airline has started recovering from the Covid-19 disruptions.

In a memo addressed to KQ’s chief people officer Evelyne Munyoki, Kenya Airline Pilots Association (Kalpa) wants the airline to pay them full salaries, saying that the carrier has recorded improved performance in business in the last few months.

KQ’s net loss stood at Sh11.49 billion in the six months ended June— a 19.8 percent reduction from the Sh14.33 billion loss it incurred in the preceding similar period, narrowing its half-year loss by a fifth.

It has opted to pay workers between 70-95 percent of their monthly pay, promising to settle the balance once it offset accrued payments to lenders and suppliers towards the end of this month or early next year.

But Kalpa— which represents 414 KQ pilots—wants the airline to settle 100 percent of the pay, saying that its members, who are in the same category as KQ suppliers and other workers have continued to offer their services despite significant financial strain.

“In line with your policy to fulfil backlog payments to other suppliers, we urge you to similarly honour your obligations in as far as our members’ terms and conditions of service is concerned,” said Kalpa general secretary Murithi Nyagah in a letter dated November 30, 2021.

“This is in accordance with initial understanding and agreements that the salary payout rates would be reviewed upwards in tandem with KQ’s improved performance.”

Kenya Airways chief executive Allan Kilavuka has however stood his ground saying that in as much as he is willing to restore workers’ pay to 100 percent in the near future, the airline is still bogged down with deferred payments to lenders and suppliers.

“Considering that the business is yet to recover fully and the need to meet and manage critical support for business continuity and recovery, it is impossible to meet the pilot union's demands for 100 percent salary and allowances for November 2021. However, as communicated to our staff before, we will revert to full pay at the soonest possible opportunity,” Mr Kilavuka said.

Mr Kilavuka noted that KQ has continued to prioritise payment of staff salaries despite the dire financial constraints while managing other obligations to ensure continued operations and business recovery. As a result, all employees in the organisation have been on a reduced salary payout since April 2020.

“However, what is currently weighing us down is the backlog of payments to our lenders and suppliers which we deferred during the pandemic,” said Mr Kilavuka in another memo to staff members dated November 15, 2021.

He says he informed staff that despite domestic operations improving to 90 percent in October 2021 compared to the 2019 pre-Covid travel numbers, performance on international routes, which make the bulk of its revenue, stood at 52 percent of the same period.

The carrier in January subjected workers to pay cuts of up to 30 percent to preserve cash amid unrelenting financial challenges due to the Covid-19 pandemic.

Mr Kilavuka said then that the new cost-cutting measure, aimed at keeping the company afloat during this difficult time, will target workers earning Sh45,000 and above.

The payroll cuts of between five percent and 30 percent 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.

Its full net loss for the financial years ended December 2020 nearly tripled to Sh36.2 billion, the worst ever in the history of the airline, on account of Covid-19 disruptions that led to a sharp decline in passenger numbers.

But the carrier has continued to record improved business since it resumed international flights last year in August. Demand for air travel has slightly improved a move that has seen the carrier up its frequencies in some routes such as London.

“Since December 2020, there has been no attempt to review the salary payout upwards despite the evident business recovery. This can only translate to intentional refusal on your part to deny deserving employees an improved salary payout rate,” said Mr Nyagah.

The development comes barely a few months after KQ withheld the March salaries for its pilots who were demanding smaller pay cuts in the wake of business disruptions caused by the Covid-19 pandemic.

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.

The carrier however released frozen pilot pay a few days later, shrugging off a row over the flyers' demand for reduced salary cut in the wake of business disruptions caused by Covid-19.

Although the pilots are currently being paid 70 percent 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.

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

Managers at the airline are 22 percent of the workforce and draw compensation equivalent to 22 percent of the payroll costs.

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