National carrier Kenya Airways (KQ) is planning to retrench hundreds of workers in a restructuring move aimed at returning the airline to profitability.
This follows a Ksh26 billion bailout from the government meant to keep KQ from collapsing, after years of loss-making. The carrier has accumulated losses amounting to Ksh127 billion as of August 2021.
According to KQ CEO Allan Kivaluka, the carrier aims to reduce its operating costs by working on a lean budget and staff, and also reducing its staff numbers. KQ will also reduce the number of aircraft it operates.
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“It’s, however, important to mention that the financial support from government is also conditional on Kenya Airways and all other stakeholders, such as suppliers, bankers, shareholders and employees adhering to the agreed reforms to support the turnaround,” Kivaluka told employees.
“While the good news is that we have already taken some measures, including staff rationalisation and cost containment measures, we need to up the momentum for the next phase to ensure that the future of pour airline is guaranteed.”
Already, KQ has contracted US-based consultancy firm, Seabury Group, to conduct the restructuring plan covering the network, fleet and required resources and implement the restructuring plan.
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“Seabury will conduct a comprehensive assessment of all aspects of the business and business plans, support leadership in developing a comprehensive restructuring plan,” added Kivaluka.
Out of a fleet of 36 aircraft KQ owns 19 aircraft wholly while the rest are leased, with 15 from Embraer.
Currently, KQ flies to 56 destinations worldwide, with most, 46, being in Africa.
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The government of Kenya holds a 48.7 percent stake in KQ, with an additional burden of Ksh84.81 billion of guarantees to creditors.
Currently, the carrier has negative equity of Ksh73.8 billion from Ksh64.2 billion in June 2020.
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