Kenya Airways to lay off staff, sell planes in turnaround plans

PHOTO/Citizen Digital

– The troubles in Kenya Airways are as a result of a slump in the tourism sector and competition from other carriers within the region, primarily Middle Eastern airlines

– Since Kenya Airways reported record losses, the shares of the airline have witnessed a significant drop at Nairobi bourse

Kenya Airways Chief Executive Officer Mbuvi Ngunze has announced fresh plans of staff layoffs and reducing the airline fleet in a bid to turn around the fortunes of KQ that recorded historical KSh 25.7 billion loss in 2015.

On Thursday March 10, 2016, the board of the airline, is expected to meet for the second day in a row to discuss the turnaround plans aimed at raising up to KSh 70 billion to return KQ to a profitable venture.

Speaking on Citizen TV on Wednesday March 9, Ngunze hinted at the staff job cuts but said there will be talks before the action is taken.

“Do we need to rationalize our staff? Do we look at opportunities to reduce costs? Yeah.We will be totally sensitive with this as this is an emotive issue, but certainly there will be some hits,” he said, as quoted by Bloomberg Business.

The Standard newspaper reports that Kenya Airways human resource director Alban Mwendar has already laid out either job cuts, pay cuts or retrenchment as the options that the staffers will be presented with.

“As part of the airline turnaround strategy, all options are on the table. We acknowledge the need to significantly reduce our cost base in all areas. For personnel cost, we will discuss with all the staff and unions where appropriate to find the best solution,” he is quoted as saying.

But besides laying off workers, other strategies that the national carrier has spoken of including reducing the number of its fleet, reviewing its relationship with KLM as well as getting bail out loans.

The government owns 28% of Kenya Airways.

The state has been reviewing the airline’s partnership with Air France-KLM, the second-largest shareholder: “It’s possible to take up 50% equity, depending on how other shareholders want to participate in the whole restructuring,” National Treasury Secretary Henry Rotich said in February 2016, as quoted by Bloomberg Business.

In 2015, Transport Cabinet Secretary James Macharia said that the airline was going to immediately sell four of its old planes.

The airline has a fleet of 52 planes.

KQ had also announced that it secured KSh 20 billion loan from AfrExim bank to avoid grounding its operations.

This article was first published on Tuko

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