Kenya Airways has resumed pay cuts following a delay by the government in disbursing the KSh20 billion bailout package, a month since it was allocated in the supplementary budget for the financial year 2021/22.
Kenya Airways CEO Allan Kilavuka says the carrier will revert to reducing workers’ pay at rates effected in November 2021. This will take effect from their February 2022 salaries.
The move to slash workers’ salaries seeks to preserve cash, with the promise of settling the deducted pay once the National Treasury disburses the KSh20 billion.
Besides salaries, the airline also needs the bailout money to settle utility bills such as security, maintenance of grounded planes, electricity, and parking.
The airline had only resumed full payment of workers’ salaries in December 2021 after a long court battle with the pilots union.
The provision of the bailout to the airline was an alternative to the initial plan to nationalize the airline, which reported losses worth KSh36.2 billion in the 2020 financial year. The nationalisation plan approved by lawmakers in July 2019 would have led to the delisting of Kenya Airways from the Nairobi Securities Exchange (NSE).
Nevertheless, the carrier forecasts its revenues to rise by 20% rise this year.
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