Kenya Airways (KQ) is facing its severest turbulence yet after the Covid-19 pandemic as the pilots’ union defied a court order and sack threats to ground its operations for the third day.
The labour dispute, which escalated after the Transport and Labour ministries failed to broker a deal, has seen more than 300 tonnes of perishable cargo rot at the airport and left thousands of passengers stranded. The airline had not resolved the crisis by the time of going to press.
This comes days after it emerged that the national carrier had defaulted a Sh102 billion US loan, forcing the government to bail it out.
KQ chief executive Allan Kilavuka asked all pilots scheduled to be on duty Sunday to report to work or face disciplinary action.
But the Kenya Airline Pilots Association (Kalpa) maintained that none of its members will fly a KQ plane until their demands, including immediate reinstatement of the staff provident fund, are met. The union, which is also pushing for the sacking of the KQ top management team, accused the airline of mishandling the labour dispute by allegedly refusing to engage them to end the impasse.
"Kalpa is ready to call off this industrial action to allow Kenya Airways to resume full operations immediately. However, this is totally dependent on Kenya Airways management agreeing to resolve the issues raised by the pilots," the union said in a statement.
KQ has argued that its financial health does not allow it to meet the pilots’ pay demands immediately and has threatened to sack those who defied last week's court order suspending the strike.
The strike has forced the airline to cancel 56 flights as of Sunday. Over 12,000 passengers are still stranded at Jomo Kenyatta International Airport (JKIA) in Nairobi while more than 300 tonnes of perishable goods have been rotting at the JKIA since Saturday morning.
KQ has also not been able to fly pharmaceutical products.
This strike, KQ says, will cost it approximately Sh300 million a day. In a week, this translates to Sh2.1 billion.
By Sunday, the airline was only able to operate four flights, mainly by pilots who are non-Kalpa members.
The flights were destined for Addis Ababa, Entebbe, and Mombasa. The fourth flight was scheduled to leave for Lusaka in the evening from JKIA.
The strike has also put it in a fresh reputational crisis following protests by stranded passengers, forced to cancel their flights and book other airlines, a decision that comes with expensive cancellation bills.
The Transport ministry, which has been trying to broker a deal with the pilots to suspend their strike, says the government has in the past three years injected more than Sh60 billion to keep the KQ afloat.
"In fact, this administration, in its first 10 days in office, channelled Sh10 billion from the exchequer towards the sustenance of Kenya Airways, notwithstanding the economic crisis and the biting drought affecting the country," Roads and Transport Cabinet Secretary Kipchumba Murkomen said.
"In the last two days, there have been relentless efforts by the Ministry of Labour and my ministry to try and resolve this issue. These efforts have, however, come to naught."
Mr Murkomen said that the Ministry of Labour now has to activate the procedures governing industrial relations in light of Kalpa disregarding the court order.
"I urge the pilots to be mindful of the consequences of defying a court order and to urgently return to work because impunity cannot be an option," he said.
This comes weeks after it emerged that KQ had defaulted on a Sh102 billion loan from the United States government.
The Treasury revealed in the Annual Debt Management Report 2021/2022 released last week that KQ borrowed a total of $841.6 million (Sh102 billion) from the Exim Bank of USA to purchase seven aircraft and one engine. Out of this amount, the Kenyan government had guaranteed $525 million (Sh63.5 billion).
"Kenya Airways defaulted on both the guaranteed portion of the loan amount as well as the non-guaranteed portion. The National Government is in the process of novating the debt to be finalized during FY 2022/23," the document says. KQ has, however, disputed the size of the loan in default but acknowledged the airline is facing financial challenges as a result of the Covid-19 pandemic that has made repayment of the debt difficult.
“The value you quote for the US Exim facility is not correct. $485 million is what relates to the US Exim guaranteed debt,” Mr Kilavuka told the EastAfrican.
The airline, however, had a major relief after the rest of the aviation workers dropped their planned strike to protest reduced pay increases for the second time in less than seven months.
The Kenya Airports Authority (KAA) said Sunday that aviation workers had reported to work.