Kenya Airways chief executive Allan Kilavuka. FILE PHOTO | NMG His predecessors, Mbuvi Ngunze and Sebastian Mikosz, last disclosed annual salaries of Sh70.6 million and Sh62.8 million respectively.
Mr Kilavuka previously headed the national carrier’s low-cost subsidiary Jambojet.
The pay cut among the executive ranks is seen as symbolic, barely making a dent in the airline’s cost structure.
The airline’s top executives earn less than Sh200 million annually against a total wage bill of Sh16 billion.
DEEPER WAGE CUTS But analysts reckon that Kenya Airways could be setting the stage for deeper wage bill cuts in an environment where airlines are calling for State aid to avoid ruin. The airline’s total costs are about Sh150 billion annually, indicating that major savings will likely come from reduction in staff numbers and lower direct costs as aircraft are grounded.
The company has started terminating some of its routes and is expected to shrink its operations further in the coming days as Kenya and other governments cut back on international travel.
By giving up part of their compensation, the executives will save the company less than Sh60 million in 12 months.
Mr Kilavuka said the measures were arrived at following a meeting with the top leadership team. The airline’s board chairman, Michael Joseph, earned Sh18 million in fees in the year ended December 2018.
The other non-executive directors were paid between Sh437,000 and Sh2.2 million over the same period.
The travel restrictions will worsen KQ’s already precarious financial position.
The National Securities Exchange-listed firm made a net loss of Sh8.5 billion in the half year ended June, more than double the net loss of Sh4 billion the year before as costs rose faster than revenue.The loss saw the company’s negative equity widen to Sh16.1 billion from Sh2.4 billion, underlining its capital crisis.Turnover in the review period rose to Sh58.5 billion from Sh52.1 billion, representing a 12.2 percent increase.The government last month provided a Sh5 billion loan to the company to sustain operations and is expected to provide more funds if the airline is to meet its short-term obligations to employees and lessors of aircraft. Airlines around the world have suspended flights, sent workers home and asked governments for bailouts.Carriers in the United States, for instance, are seeking a bailout in the order of $50 billion (Sh5.1 trillion).Kenya Airways has so far temporarily suspended flights to and from Guangzhou, China following the outbreak of the coronavirus.It has also temporarily suspended operations on […]