National carrier Kenya Airways (KQ) plans to clear the Sh6.5 billion backlog in deferred salaries by next year in an effort to diffuse the rising staff unrest at the airline.
The airline’s chief people officer Tom Shivo said Tuesday the airline has been paying workers deferred salaries since December 2021 and they are committed to settle the amount due by June.
The amount in default had accumulated since April 2020 and in 2021 when the airline’s operations were hit by the Covid -19 pandemic.
The airline has been struggling to keep up with its various obligations following a series of big losses.
It posted a net loss of Sh11.49 billion in the six months ended June 2021 from the Sh14.33 billion loss it incurred in the preceding similar period.
“The outstanding amount in deferred salaries to workers is Sh6.5 billion and we expect to clear this by June 2023,” said Mr Shivo.
“It is important to note that out of this amount, we have paid up to 40 percent to date.” The airline last year 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 early next year.
The pay cuts were up to 30 percent to preserve cash amid unrelenting financial challenges due to Covid-19.
The airline said then that the new cost-cutting measure, aimed at keeping the company afloat during the stormy period, targeted workers earning Sh45,000 and above.
The non-payment of workers deferred salaries saw Kenya Airline Pilots Association (Kalpa) last year demand full reinstatement of their pay, saying that KQ had recorded improved performance.
Kalpa — which represents 414 KQ pilots — wanted 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 offered services despite the financial strain.
