KQ outsources its low-cost carrier cabin crew function to a third party
Posted Tuesday, July 31 2012 at 19:25
- Move meant to shield airline from the high staff costs and possible labour unrest as it fights rivals on regional routesMove meant to shield airline from the high staff costs and possible labour unrest as it fights rivals on regional routes
Kenya Airways has outsourced the air cabin crew staff function as it moves to put a lid on rising staff costs and shield itself against labour unrest ahead of the launch of its low-cost carrier.
The national carrier has engaged a private company - Career Directions which specialises in human resource management - to provide cabin crew services to its budget airline, Jambo Jet.
Staff who were hired late last year in preparation for the launch were on Monday transferred to Career Connection cutting any direct link with KQ.
Employees who spoke to the Nation but requested anonymity for fear of losing their new jobs, said the airline has dissociated itself from direct responsibility regarding its employees.
“We have been handed to the new company and our terms and conditions including health, salary and other benefits have been downgraded,” one of the affected cabin crew members said.
In what appears to be aimed at keeping staff costs at par with other low cost carriers, the airline is said to be offering a basic salary of about Sh45,000 for entry level crew.
“The medical cover now only supports the employee and not the entire family as is the case for standard Kenya Airways employees,” the source added. Captain Paul Njoroge, vice chair of the Kenya Airline Pilots Association said the union was aware of the move but said pilots will not be affected.
“Jambo Jet will have its own employees,” Mr Chris Karanja, Kenya Airways spokesperson said in an email but did not say why the airline decided to outsource this function even as he reckoned that cabin service is what defines an airline.
Outsourcing, though, is becoming an international practice especially in aviation given the rising clout of labour unions in the sector. According to its website, Career Directions offers outsourced labour management services, executive recruitment, management training, payroll processing and a complete management of a human resource department of a company.
However, its contacts have been unoperational for the last two days and its telephone numbers were temporarily out of service. By March this year, KQ had about 4,834 employees, a 10 per cent rise from 2011. A recent report by Renaissance Capital notes that labour costs account for over 14 per cent of KQ’s expenses, making it the second largest cost base.
Kenya Airways is counting on its low-cost subsidiary to handle its regional operations, in what will open a new battlefront with budget operators such as Jet Link, Fly540 and Air Kenya for control of the Eastern Africa routes.
The launch of Jambo Jet—expected to be before end of this year— marks a u-turn after the airline absorbed its then low-priced unit known as Flamingo Airlines to its group operations in 2004.