Kenya Airways retrenches staff

Nairobi, Kenya (PANA) - Kenya's national carrier, the Kenya Airways (KQ), Friday embarked on a retrenchment exercise which will affect both junior and management staff.

The exercise will first offer a Voluntary Early Retirement Package to staff willing to leave the organization as part of its on-going structuring that ends 31 August, according a staff circular released by the airlines' management.

“We will initially begin with a voluntary early retirement initiative, but in the event that we do not get the required numbers then we will move to the next step of identifying individuals to be retrenched,” the circular stated.

Employees willing to take on the voluntary early retirement deal will have until 10 August to submit their applications.

The package, however, is not open to staff who are within 12 months of normal retirement, but will apply to junior staff above the age of 50 years.

The terms of the severance package for affected staff include three months salary in lieu of notice, 20 days salary for every completed year of service and accrued leave days at the rate of 20.5 working days per month.

The airline’s Managing Director, Titus Naikuni, said several factors had contributed to the decision to lay off staff, including poor performance of KQ’s European routes and high employee and fuel costs.

He added that the airline’s wage bill has hit Sh13.5 billion, with fuel expenses running the company into Sh40 billion a year that has resulted in the withdrawal of non-performing routes in recent months.

High fuel costs hit KQ profits for the financial year ending 31 March, 2012, dropping by a whopping 57 percent, with net profit dropping from Sh3.5 billion in the last financial year to Sh1.6 billion this year.

“We hope to save up to Sh1.5 billion for the year as a result of the restructuring,” Naikuni said.

The move, essentially laying off of staff to cut costs, will affect 4,000 Kenyan staff and 600 foreigners working for the airline.
-0- PANA DJ/VAO 3Aug2012