Kenya Airways says it will reduce its workforce in a right sizing largely attributed to muted recovery in demand for travel following the coronavirus pandemic.
This is part of the airline’s ongoing turnaround programme to ensure business sustainability. It includes focusing on cost reduction initiatives, revenue enhancement initiatives, Network expansion, revamping our customer experience, and changes in senior management.
As at the end of the Financial Year 2019, Kenya Airways had a headcount total of 3,734 staff. It also operated 36 fleets across its 54 global destinations.
In 2019, KQ recorded a net loss of Kshs 12,985 million compared to Kshs 7,558 million reported in the year 2018 largely attributed to an increase in operating costs associated with a 15 percent rise in capacity deployed in connectivity routes.
“A decision has been reached to carry out an organisation-wide rightsizing exercise which will result in a reduction of our network, our assets, and our staff. Effectively, we have commenced a phased staff rationalisation process, which we expect to conclude by September 30, 2020,” Allan Kilavuka, KQ CEO disclosed in the memo.
“With the suppressed demand for air transport, a large part of our fleet will remain grounded. We will also operate a reduced network when we resume our services as we anticipate that it will take some time before the industry starts to rebound.”
The current crisis occasioned by the Covid-19 pandemic forced the airline to suspend most of its operation from 25th March 2020 with the exception of cargo flights.
“We estimate that it will take at least a year to gain the confidence of the travellers and start recovering the travel demand,” Micheal Joseph, the Airlines’ Board Chair said during their 44th Annual General Meeting.
Kilavuka further said, “KQ’s competitiveness continues to be impeded by high direct operating costs. Due to this we are focusing on systematic improvement in our operational efficiency and optimising our cost structure. This in turn will lead to improved customer offering and better utilisation of our assets.”
The company’s shares were stopped from trading at the Nairobi Securities Exchange from July 3, 2020, for the next three months following the submission of the National Aviation Management Bill to Parliament.
If adopted, it will lead to the formation of an Aviation Holding Company to run Kenya Airways, Kenya Airports Authority (KAA) and the Kenyatta International Airport (JKIA).