Kenya Airways chairman Michael Joseph during the airline's half-year results' briefing at the KQ hangar on August 27, 2019. PHOTO | DIANA NGILA | NMG
Kenya Airways (KQ) chairman Michael Joseph Monday rebuffed repeated calls to step down together with the airline’s CEO, Allan Kilavuka, by pilots on a day the High Court stopped the flyers’ planned strike.
Mr Joseph, who was handed a fresh three-year term chairman in July, informed the carrier’s workers through memo that there was no justification for their resignation.
The pilots had called for the ouster of the chief executive and the board as well as the reinstatement of their pension perks to avoid grounding planes from Tuesday.
The Labour Court Monday temporarily halted the strike, which had threatened to paralyse KQ operations and derail its recovery from effects of travel restrictions that followed the Covid-19 pandemic.
KQ on Friday sought court orders to stop the strike, citing the risk of paying hefty fines on cancellation of flights, cash flow strain and revenue losses.
Mr Joseph said yesterday the carrier was working on peace talks with the Kenya Airline Pilots Association (KALPA), despite insisting the carrier cannot meet the flyers’ demands.
“They have called for Allan [the CEO] and myself to resign and the board to step down but there is no clear justification for this other than a general statement about
mismanagement and poor decisions without any details,” said Mr Joseph in a letter to staff Monday.
“The board and I believe our shareholders have absolute confidence in Allan and his management team. No amount of threats or coercions will compel us to ask for any resignation from anyone, and certainly, I have no intentions of stepping down unless the KQ board, following due process, requests my resignation,” he said.
KALPA, which draws the bulk of its membership from Kenya Airways, has cited four reasons for going on strike.
In addition to undisclosed governance and leadership issues, the pilots union is unhappy with the airline’s failure to implement pay agreements (CBA), alleged victimisation of KALPA members and non-payment of monthly pension contributions for staff.
KQ froze paying the monthly pension contribution equivalent to 10 percent of the workers’ pay at the peak of Covid-19 pandemic.
It needs about Sh1.3 billion annually for the contributions, with the pilots’ share accounting for about Sh700 million.
“As you know, we continue to pay back the deferred salaries and expect to start paying back the contributions to the provident fund in 2023,” said Mr Joseph.
“Unfortunately, we cannot do both at the same time as we are still paying back our outstanding arrears from the Covid period and keeping up lease payments on our aircraft.”
The combative pilots’ union has over the past two years frozen KQ’s plans to reduce the number of pilots to 207 from over 400 over a three-year period.
The airline, which has been surviving on State bailouts since the Covid-19 pandemic, reported a Sh9.8 billion loss in August — a better performance than the Sh11.48 billion loss it recorded in the same period a year earlier.
The airline’s chief commercial and customer officer, Julius Thairu, told Business Daily that passenger ticket sales have outperformed forecasts and were on course to returning an operating profit if the current trend persists to year-end.
But he warned that the strike could derail the carrier from meeting the targets.
Average revenues from seat bookings, he says, have doubled to more than Sh300 million a day compared with last year and more than four times the levels in 2020 when passenger flights were grounded for months.
“We see very strong recovery in [passenger] business. We are tracking ahead of our own internal expectations. On average we are generating revenues… somewhere between Sh320 and Sh350 million a day from Sh60 million in 2020 and Sh150 million in 2021,” Mr Thairu said.
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