KQ pilots lose bid to stop sale of planes

Corporate News

A Kenya Airways plane at the Jomo Kenyatta International Airport. PHOTO | SALATON NJAU 

By BRIAN WASUNA, bwasuna@ke.nationmedia.com

In Summary

• High Court judge Monicah Mbaru has lifted an order stopping the airline from disposing of the aircraft, arguing that the sale of the planes has no bearing on the pilots’ employment status.
• The pilots had asked the court to stop Kenya Airways from offloading the planes until audit firms McKinsey and Seabury complete an audit into the carrier’s financial situation and operating structure.

National carrier Kenya Airways (KQ) has won a court battle to sell part of its fleet despite protests from pilots who fear the disposal could render them jobless.

High Court judge Monicah Mbaru has lifted an order stopping the airline from disposing of the aircraft, arguing that the sale of the planes has no bearing on the pilots’ employment status.

The judge held that KQ would have to follow guidelines of a collective bargain agreement that it has with the pilots before sacking them.

The Kenya Airline Pilots Association (Kalpa) had asked the court to stop Kenya Airways from offloading the planes until audit firms McKinsey and Seabury complete an audit into the carrier’s financial situation and operating structure. Kalpa claims the intended sale is part of a plan to render B777-200 and B777-300 pilots redundant.

The airline hired the audit firms to help craft a strategy to help KQ rebound from a massive Sh25.7 billion loss reported in the financial year ended March 2015. The auditors had recommended that the carrier sells the B777-200 and B777-300 aircraft.

Justice Mbaru, however, said the company had in its response guaranteed that the pilots’ jobs are safe.

“KQ has assets comprising its staff and the subject aircraft. The option taken by KQ is not to terminate pilots’ employment but rather to dispose of part of its other assets. There is nothing definite that Kalpa’s members shall be terminated or redundancy shall follow,” said justice Mbaru.

The court ruling means the suit will be set down for full hearing before the judge but Kenya Airways can continue with its plan to offload the aircraft.

The national carrier hired British firm Cabot Aviation to help it offload the seven planes, which are to be replaced by the newer B787 Dreamliner model. KQ has already received six out of nine Dreamliners.

Cabot was to help sell the planes owned by Kenya Airways and negotiate sub-lease agreements for those that the national carrier has chartered from General Electric Capital Aviation Services.

READ: Kenya Airways to sell four planes to raise cash

The airline had in its response said that it had notified Kalpa of the decision to offload the B777-200 and B777-300 aircraft between August and October. It added that the decision was based on economic difficulties that have seen its clientele drop sharply.

The fall in the airline’s passenger numbers was mostly the result of increased terrorism attacks in Kenya and the Ebola outbreak in West Africa.

Kalpa had maintained that Kenya Airways should clearly define the pilots’ fate before selling the aircraft. The lobby also wanted the airline to set out compensation terms in the event pilots were to be sacked.

KQ argued that Kalpa’s suit had presented legal hurdles in its attempt to dispose of the aircraft as it was in advanced stages of negotiations with Cabot.