Kenya Airways (KQ) has signed a collective bargaining agreement (CBA) with the Kenya Aviation Workers Union(Kawu) that will see unionisable airport workers get a pay rise of 10 percent in 2024 and 12 percent in 2025.
KQ Group Chief Executive Allan Kilavuka said the pay rise is effective this month and will run until 2025.
“This agreement grants Kawu members a 10 percent first year and a 12 percent second-year increase (making it 22 percent by the end of the two years) on their basic salary, among other allowances, over the specified period. The CBA is set to run for the next two years,” said Mr Kilavuka in a statement.
Kawu had a total of 3,000 unionisable employees in the year ended December 2022, with most of them on short-term contracts.
“It's a good deal for my members. I’m impressed. We commend the leadership of Mr Kilavuka and the head of human resources Tom Shivo for bringing back industrial harmony at the airline," Kawu Secretary General Moss Ndiema said.
The pay deal will raise the company’s expenses, with salaries among its major operating costs.
KQ's employee costs dropped to Sh12.62bn in the financial year ended December 2022 from Sh12.71 billion a year earlier.
In the half year that ended June 2023, staff costs rose by Sh341million.
The pay rise comes at a time when several companies have either frozen salary increments or opted to cut jobs as sales and margins fall.
KQ reported its biggest half-year loss in August, weighed down by heavy forex losses and a pile-up of debt that have upset its turnaround plan.
Despite a 56 percent growth in revenues to Sh75 billion, a 43 percent jump in passenger numbers to 2.3 million, and its first operating profit in six years, higher costs pushed the airline deeper into the red after it more than doubled its losses to Sh21.7 billion in the six months to June 2023.
The loss is a 120 percent increase from the Sh9.9 billion losses the airline reported during the first half of 2022 and is more than the Sh15 billion full-year loss for 2021.
