Pilots working for the national carrier Kenya Airways (KQ) could now be forced to work as casual labourers, whereby they are paid per flight and not monthly as is the current arrangement.
Speaking to Business Daily, KQ CEO Allan Kivaluka says that the carrier’s hopes for a bailout are diminishing, the reason for the proposed arrangement.
“We are looking at an arrangement where we pay pilots as they fly. Where do we get cash to pay pilots if planes are grounded?” said Kivaluka.
The Kenya Airline Pilots Association (KALPA) however said that they are not aware of the plan, since it has not been proposed to them.
“I am not aware of that proposal as we have not had that negotiation with Kenya Airways,” said KALPA secretary-general Muriithi Nyaga.
KQ is also planning to offload at least 207 pilots in the next three years, whom it says account for almost half of its payroll.
According to the cash strapped carrier, the pilots’ salaries amount to 45 percent of its payroll costs, despite pilots being only 10 percent of the workforce.
KQ expects that the move will save it Ksh3.24 billion every year. In the year ended December 2019, the company total wage bill to pilots only amounted to Ksh6.48 billion. This translated to Ksh1.3 million per pilot per month.
KQ has so far laid off some 650 employees, mostly trainee pilots, trainee cabin crew, technician trainees and newly hired staff on probation, and plans to shed 590 more jobs.
“Our target is to reduce the company’s overall total fixed costs, not just staff costs, by about 50 percent in response to our revenue projections,” said Kivaluka in August.
Managers at the airline, who account for 22 percent of the workforce take home 22 per cent of the payroll costs.
The airline sank into losses in 2014 after purchasing several aircraft in expansion move, and has been recording losses year-on-year since then.
The carrier recorded a Ksh13 billion loss for the year ended December 2019, from a loss of Ksh7.5 billion in 2018.