National carrier Kenya Airways (KQ) is planning to sack at least 207 of its 414 pilots in the next three years as part of its plan to cut on costs as the airline continues to find its way out of the red exercabated by the economic effects of the COVID-19 Pandemic.
The company is of the view that laying off the pilots will go a long way in trimming costs as the pilots’ salaries account for 45 percent of its payroll costs despite the pilots being only 10% of the employees on KQ’s books.
KQ expects that the move will save it Ksh3.24 billion annually. In the last financial year ended December 2019, the company paid each pilot Ksh1.3 million per month taking the total amount paid to this class of employees to Ksh6.48 billion. The Business Daily reported on Wednesday.
“Based on our three-year projection, we will require 50 percent to 60 percent of pilots to efficiently support the reduced operations,” KQ CEO Allan Kivaluka told the publication.
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 boot 590 more employees.
“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,” Kilavuka further told Business Daily.
“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.”
On the other hand, the airline’s senior management account for 22 percent of the workforce take home 22 per cent of the payroll costs.
In the full year ended December 2019, the company posted a Ksh12.9 billion loss continuing the company’s further slide into negative territory.
The government is mulling over plans to nationalize the perennial loss-maker after plans to revert the airline back to profitability flopped.
KQ resumed operations in July after a four-month COVID-19 induced hiatus that crippled the company financially forcing the company to effect up to 70% salary cuts.