Kenya Airways #ticker:KQ will get rid of some assets, reduce its network and lay off an unspecified number of workers to limit losses from Covid-19.
Chief executive Allan Kilavuka said in an internal memo that KQ arrived at the decision following a review of the business.
The coronavirus crisis has hit the global aviation industry hard, with African carriers alone expected to lose $6 billion this year in revenue.
Kenya Airways declined to comment on whether the reduction of the assets will include sale or leasing of its fleet.
“After a comprehensive review, a decision has been reached to carry out an organisation-wide rightsizing exercise, which will result in a reduction of our network, our assets, and our staff,” said Mr Kilavuka in an internal memo to the staff.
Kenya Airways had previously leased some of its wide-body aircraft to Omani and Turkish airlines but it took back some of them when it started direct flights to the US in 2018.
Mr Kilavuka said they are waiting for the approval of the board of a review that may see the airline suspend, cut frequencies or abandon some of the routes.
The carrier was struggling long before the Covid-19 outbreak, posting losses of almost Sh13 billion in 2019.
Kenya Airways cut salaries by as much as 80 percent when the crisis started and sought a government bailout to help it take care of running costs after it grounded its planes when Kenya stopped commercial passenger flights to curb the spread of the virus.
The government declined to bail it out, opting to press ahead with a pre-pandemic plan to nationalise the carrier.
The carrier was struggling long before the outbreak, posting 2019 losses of almost Sh13 billion.
Sources reckon that hundreds of workers will be targeted in the layoff plan.
On Friday, the Nairobi Securities Exchange suspended trading of Kenya Airways share for three months, citing the government’s plan to restructure the carrier after it submitted to Parliament a Bill on the nationalisation of the airline.