Passenger and cargo carrier Air Afrik has announced plans to lay off 80 per cent of its employees as part of the company’s restructuring process.
The move that will take effect in November will see at least 200 airline’s employees in Kenya and South Sudan sent home.
According to the airline, the management arrived at the decision following the loss of a Ksh2 billion plane-leasing contract with the government of South Sudan.
AirAfrik linked its misfortunes to fraud where it accuses Stanbic Bank of “banking irregularities and fraudulent banking dealings.”
In a statement, the airline’s management stated that since the loss of the contract and the court case against Stanbic Bank, the company has been reviewing its process, “fitting people into the right jobs and in the process, some roles have become redundant.”
“We understand this is a challenging time for our team, but these steps were necessitated following Stanbic Bank’s negligent errors, oversight and unlawful actions,” the statement reads in part.
In the case, Stanbic Bank allegedly credited $7.2 million(about Ksh746.6 million) down payment to Air Afrik’s bank account held in the same bank , only to reverse it a few days later.
The South African-owned bank reportedly admitted having made an error in the transaction.
The airline accuses the bank of allegedly withholding crucial information from the company as its customer, with a view to covering its negligent errors, oversights and unlawful actions.
It faults the institution for allegedly failing to own up and take responsibility for its owner errors and oversights and compensate the plaintiff adequately for the damages and inconveniences suffered.
“This unfortunate situation was created by a severe lack in liquidity at the company, which resulted from failing to act diligently before freezing our funds without a valid court order,” the statement reads.
The misdeeds, the company says, have cost the airline huge losses and job cuts, of which it seeks compensation amounting to $14.4 million (Ksh1.4 billion).