•Both the KQ board and the Kenya Airline Pilots Association believe nationalising the airline can help it return to profitability.
•Pilots however worried downsizing the airline could lead to its collpase in the wake of rising regional competition. Kenya Airways plane Boieng 777-200 ER Photo/file Downsizing of Kenya Airways operations, which has seen hundreds of employees sent home, has led to a bitter fall-out between management and the company’s staff, which continues to play out.
This, even as the airline remains in the process of being nationalised, debate pending in Parliament, a move that is expected to help turn-around the national carrier which has remained in losses for the past six years, going into the seventh.
KQ’s worst year was 2016, when it reported Sh26.2 billion loss sinking deeper from a Sh25.7 billion loss.
This year, it reported a net loss of Sh12.9 billion for the year ended December 2019, a dip from Sh7.5 billion in 2018.
“Some of the contributors of the loss include the adoption of IFRS 16 and increase in operating costs associated with a 15 per cent increase in capacity deployed to offer increased connectivity,” chairman Michael Joseph told investors on May 26.
Covid-19 has worsened KQ’s financial position with management saying it has to cut down on operations, including laying off staff to remain afloat.
It is targeting at least 1,500 of the 4,300 workforce it has.
While management insists staff rationalisation is one of the ways to remain afloat, the Kenya Aviation Workers Union (KAWU) and Kenya Airline Pilots Association (KALPA) think otherwise, with nationalisation one of the few options left to turn around the airline.
Both the KQ board and KALPA believe nationalising the airline can help it return to profitability.
The government currently owns nearly 50 per cent of Kenya Airways, 38 per cent is owned by the banks and seven per cent is owned by KLM. Minority shareholders own the balance.According to KQ chairman, the carrier has in the current financial year put out some money for buying out the minority shareholders, individual shareholders; these are the people who bought shares in Kenya Airways.“We have no money to buy out the banks and KLM, but our intention is to give them some kind of arrangement, that they will get their money in the next five to eight years,” Joseph said in an interview with the Star.KALPA has said nationalisation is the only way out but “it is not a silver […]
