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Business & Finance

Kenya Airways plans more pay cuts due to pandemic

  • At the time it forecast a fall in 2020 revenues of between 60 billion and 70 billion shillings as demand for the rest of the year was expected to be less than half that of 2019.
15 Jan 2021

NAIROBI: Kenya Airways plans further pay cuts for employees of as much as 30% after the airline was hit by the coronavirus pandemic that has caused a slump in air travel, an internal memo showed on Friday.

The cuts follow those made in March last year following Kenya's first confirmed COVID-19 case, which prompted the government to suspend domestic and international commercial passenger air travel.

The latest cuts, of 5% to 30% for workers with monthly earnings exceeding 45,000 shillings ($409), take effect this month and will run for six to 12 months, the company's CEO Allan Kilavuka said in an internal memo seen by Reuters.

He said in the memo that the company was grappling with debts which are at an unsustainably high level.

Kenya Airways declined to comment.

Although domestic air travel resumed in Kenya in July, followed by international routes a month later, demand has stayed below pre-pandemic levels.

In August, Kenya Airways said it had laid off about 650 workers, a month after announcing plans for an unspecified number of layoffs, cuts to its network and the offloading of some assets.

At the time it forecast a fall in 2020 revenues of between 60 billion and 70 billion shillings as demand for the rest of the year was expected to be less than half that of 2019.

Trade in the company's shares on the Nairobi Securities Exchange has been suspended, pending a government restructuring plan, after it submitted a draft law to parliament on nationalising the airline.

African airlines could lose $6 billion in passenger revenue in 2020 after the pandemic grounded much of the global aviation industry, the International Air Transport Association said in April last year.

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