Kenya Airways unable to pay its employees

Kenya Airways Chief Executive Officer Mbuvi Ngunze addresses the media during the release of the company's half year results at Intercontinental hotel, Nairobi, on November 12, 2015. Mr Ngunze has blamed forex losses, flat revenues, reduced capacity, as well as an unabating competition from Middle East carriers for eating into the airline’s revenue margins. PHOTO | SALATON NJAU | NATION MEDIA GROUP 

In Summary

• Mr Ngunze had, however, in March this year, said the airline was experiencing tough financial times that had left it with no option but to rely on debt to sustain its nearly 4,000 work force.
• Mr Ngunze blamed forex losses, flat revenues, reduced capacity, as well as an unabating competition from Middle East carriers for eating into the airline’s revenue margins.

By BRIAN NGUGI
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Employees of troubled national carrier Kenya Airways face an uncertain Christmas after the airline said it was unable to pay their November salaries due to a cash crunch.

Staff who spoke to the Daily Nation but did not want to be named expressed frustration over the move, while confirming that all KQ employees, including pilots and cabin crew were yet to be paid.

“We would like to inform all staff that due to unforeseen circumstances in the month of November 2015, salaries will be delayed,” says the airline’s group human resources director Alban Mwenda in a staff notice number 070/2015 seen by the Nation.

The notice, dated November 25, pleads for calm saying: “We are making all efforts to have them paid in the first week of December 2015. We regret any inconvenience occasioned by the delay.”

Kenya Airways Chief Executive Mbuvi Ngunze was not immediately available for comment.

Mr Ngunze had, however, in March this year, said the airline was experiencing tough financial times that had left it with no option but to rely on debt to sustain its nearly 4,000 work force.

“...So how am I paying my staff? I am paying them through debt,” Mr Ngunze said when he appeared on a local TV station.

The national carrier extended its poor performance this year for the third year in a row when in mid November it announced an after-tax loss of Sh11.9 billion for the six months ending September, compared with a net loss of Sh10.4 billion during a similar period last year.

Mr Ngunze blamed forex losses, flat revenues, reduced capacity, as well as an unabating competition from Middle East carriers for eating into the airline’s revenue margins.

Despite the sustained loss-making streak, Mr Ngunze insisted an elaborate turnaround plan, backed by its key shareholders, including KLM and the government, would help boost the airline’s fortunes.

KQ has hired consultants McKinsey and Seabury to chart a turnaround strategy. Its reorganisation is also expected to affect employees.