Current realities make Kenya Airways pilots’ offer a good deal

Kenya Airways' Boeing 777-300ER aircraft at JKIA, Nairobi. KQ has signed a lease agreement with Turkish Airlines for one of its three Boeing 777-300 aircraft as part of cost-cutting measures. PHOTO | FILE | NATION MEDIA GROUP

What you need to know:

  • The latest point of interest is the airline’s recent announcement that it would ease off at least 600 employees to reduce costs.

  • Kenya Airways has travelled this path before and many other firms have or are currently conducting mass layoffs.

  • A favoured device for layoffs is normally to ask employees to opt for voluntary early retirement.

  • It is in this context that Kenya Airways’ recent offer to negotiate re-deployment terms for some of its Boeing B777 pilots.

Since the management of Kenya Airways launched an ambitious plan to revive the fortunes of the national carrier, debate has shifted to its mechanics.

While the need to give altitude to the faltering airline is no longer seen as an abstract and vain pursuit, it is the strategic approach that has come in for close public scrutiny and debate.

Dubbed Operation Pride, the revival blueprint, put together by the airline’s management and backed by turnaround consultants McKinsey, seeks to improve profitability and engender financial stability while at the same time re-working the carrier’s business model for greater operational efficiency and customer experience.

The latest point of interest is the airline’s recent announcement that it would ease off at least 600 employees to reduce costs with a view to eventually closing the profitability gap.

Naturally, this announcement has elicited angst among the employees and organised labour. Job cuts are an emotive issue.

This is especially so in a labour market in which one formal job sometimes supports as many as 10 people.  

But in a country and a world where many firms often find themselves teetering on the brink of financial collapse, retrenchment has always been on the table as an option for reducing costs and putting enterprise on the path to profitability again.

SOFT LANDING

Kenya Airways has travelled this path before and many other firms have or are currently conducting mass layoffs.

Retrenchments are not a novelty in Kenya. They have become an integral part of formal employment and contracting between employers and employees.

What should concern us is how they are conducted.

For instance, what has the employer done to ensure that employee interests are secured?

What measures have been taken to ensure that exiting employees are given as soft a landing as is practically possible?

What about employee rights and adherence to labour laws?

Granted, these are scores on which local firms have not exactly acquitted themselves very honourably compared to their transnational peers, but a few are catching on.

A favoured device is normally to ask employees to opt for voluntary early retirement.

This is a win-win proposition for both the employer and the employee.

The latter gets to have a say in the matter (it is voluntary), is emotionally better prepared for it, and walks away with a substantial lump sum as compensation. For the employer, it is more humane and legally safe.

UNHAPPY PILOTS

Retrenching is expensive and where there is limited cash to finance it, the company is left with little legroom.

It is in this context that Kenya Airways’ recent offer to negotiate re-deployment terms for some of its Boeing B777 pilots with friendly airlines as opposed to terminating them should be read.

The Kenya Airline Pilots Association is not happy and the matter could end up in court.

However, the pilots need to take a long-term view of things. Globally, the aviation sector has been in turbulence for a long time, with most airlines surviving on government subsidies and bailouts.

This is what has kept international carriers, including those closer home such as Ethiopian and South African airlines, in the sky despite clearly shaky fundamentals.

Kenya Airways is bending over backwards to give its most highly paid, some say pampered, employees a soft landing.

Being seconded to a partner airline for three years, subject to review or re-absorption once the airline goes back to profitability, is perhaps better than being put out on the streets.

In any case, the proposed carrier, Ethiopian Airlines, would be a good fit. Some of the pilots trained in Addis Ababa and often speak of the good facilities there.

This kind of arrangement is probably allowed in Kenya Airways’ collective bargaining agreement with the pilots.

The association is best advised to participate in the process to ensure that its members get a good deal.

The writer is a member of the Institute of Human Resource Management and a PhD candidate at the University of Nairobi