Kenya Airways says it is going to shed more jobs in its restructuring exercise which has been escalated by the coronavirus pandemic.
In a redundancy notice to Kenya Airline Pilots Association (KALPA), CEO Captain Murithi Nyaga said it plans to reduce operations before it starts to scale up operations, an exercise that could take up to 3 years.
The airline plans to lay off 40 percent of its employees in the restructuring exercise.
“The scale of this challenge requires substantial change, so we are in a competitive and resilient position to address the impact of COVID-19 withstand any long-term reductions in customer demand and any other economic shocks,” Allan Kilavuka, KQ chief Executive told Captain Nyaga.
Kivaluka said that the KQ board has approved the decision to carry out redundancy actions across the company network.
“We did an extensive internal review of our operations in May 2020 and are inevitably forced to carry out an organisation-wide restructuring. This will culminate with, among other things, a reduction in our network, our assets as well as our staff.
“Therefore, we write to inform you that following a thorough review, the Kenya Airways Board has approved the decision to carry out redundancy actions across the company network. This, therefore, is a formal notification that we will be commencing the redundancy process across the process.”
However, KALPA in an open letter to President Uhuru Kenyatta, said the downsizing would result in the country losing highly trained talent to foreign carriers. Kalpa approximates that over 4,000 families that directly depend
on Kenya Airways will be adversely affected by the redundancies.
“Downsizing will jeopardise the investment Kenya has made in improving airport infrastructure, resulting in significant tax revenue loss from the sector.”
Consequently, due to the suppressed demand for air transport, a large part of its fleet will remain grounded.
“We’ll also keep operating a reduced network as it will take some time before the industry starts to rebound,” Kilavuka said.
On Friday announced the indefinite suspension of its flights to eight African routes due to travel restrictions and falling demand.
It has projected year-over-year revenue to fall between $400 million – $500 million by December.
Currently, its shares were suspended 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).