National carrier Kenya Airways (KQ) has already spent Ksh78.2 million on nationalisation strategy and litigations, it has emerged.
This comes at a time the management is trying to cut costs by slashing employee salaries by up to 30 percent, putting into question their priorities.
Of the amount, Ksh38.2 million goes to Anjarwalla & Khanna Advocates to help develop a nationalisation strategy, which was paid through invoice number 130909501 for $203,000(Ksh22.4 million) and 130909504 for $143,000(Ksh15.8 million), May 28, 2019.
Another Ksh40 million was paid to TripleOKLaw LLP which represented KQ in cases against staff, most of whom were retrenched due to turbulent times.
As of December 2020, the carrier owed Ksh82.6 million to law firms.
Last week, the carrier announced that it was slashing employee salaries by between 5 percent and 30 percent for staffers earning Ksh45,000 and above.
KQ CEO Allan Kivaluka told the workers that the company is not able to pay any accrued amounts, and could not give a timeline of when the workers will be paid.
“We cannot pay these amounts, and further, we do not have a timeline when payment will be possible. Our proposal, however, is that, as soon as we get a sustainable cash injection that can cover our overdues, we will, at that time, commence discussions on the payment of the deferred salaries. Similarly, should our financial situation and ability to pay improve significantly, we will redeem the deferred amounts,” he added.
Kivaluka revealed that the national carrier has been unable to service its debts owed to suppliers, following government failure to inject capital. He said that the carrier’s debt had reached unsustainable levels.
“I have previously communicated that the company has been struggling to meet its financial obligations. We owe our service providers and you, our employees, significant amounts. Our financiers and the Government of Kenya are also challenging the deferred pay arrangement as it is unsustainable,” he says.