Kenya Airways is seeking to lay off half of its pilots as it slashes costs to weather the cash flow crisis deepened by the Covid-19 pandemic.
The national carrier intends to cut up to 207 of its 414 pilot jobs, which account for nearly half of its payroll costs, over the next three years.
It expects to save nearly Sh3.24 billion if it meets the desired target of having between 207 and 248 pilots on its books.
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.
The airline says that pilots account for 10 percent of the airline’s total workforce, but take home the equivalent of 45 per cent of the overall payout to employees or Sh6.48 billion based on the carrier’s wage bill for the year to December.
This means that on average a KQ pilot costs the company Sh1.3 million, a payout that matches the salaries and allowances of top chief executives of State-owned firms such as KenGen , Kenya-Re and Kenya Power .
KQ chief executive Allan Kilavuka told the Business Daily that the job cuts are based on revenue projections.
Global airlines cut their coronavirus recovery forecast on Tuesday, saying it would take until 2024 – a year longer than previously expected – for passenger traffic to return to pre-crisis levels.
“Based on our three-year projection, we will require 50 percent to 60 percent of pilots to efficiently support the reduced operations,” Mr Kilavuka said.
“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.”
This suggests that KQ is seeking cost savings of up to Sh63 billion based on its expenses of Sh127 billion for the year to December.
“We are reducing our network, our assets, and our people. The reduction will not be like for like, meaning that the shrinkage will not be uniform across the three areas,” said Mr Kilavuka.
Employees protests over wages at the national carrier have in the past resulted in flight disruptions or paralysed services on some routes.
The airline has been involved in protracted court fights with its pilots and has also suffered from poaching of talent by wealthy Middle East carriers that can afford to pay higher wages, triggering a talent war that has made pilots among Kenya’s best paid workers.
The number of KQ pilots has dropped by 91 or 18 percent since 2014 when it dipped into losses after making costly aircraft purchases, which coincided with a slump in tourist and business travel to Kenya blamed on a spate of attacks by Al-Shabaab militants.