Kenya Airways (KQ) has announced its plan to send home 600 workers as part of its reorganization plan beginning in May of this year. The largest Kenyan airline hopes the planned layoffs will boost its profitability and turn around its perennial losses, which have largely been attributed to poor management policies.
Announcing the plan, KQs Chief Executive Officer Mr. Mbuvi Ngunze said that “this is one of the hardest decisions the airline has had to make to boost its profits.” According to him, the airline expects to secure some Sh2 billion, which will be spent on various projects that will help boost revenues and minimize operational costs.
He further noted that the scheduled redundancy is just one of several restructuring plans that the indebted airline expects to carry out. Other steps include re-examining its operational model, creating a sustainable financial structure and improving its operational network.
This announcement comes a year after the airline posted a record loss of Sh25.7 billion for fiscal year 2014/2015. Since then, the carrier has embarked on a number of remedial measures, including selling some of its redundant aircrafts and formulating new marketing strategies. Kenya’s government has already injected Sh4.2 billion into the national carrier as a short-term measure to help the airline meet its financial obligations.
Many expect the planned layoffs to cause a backlash from trade unions, particularly the Aviation Worker’s Union, which has previously clashed with the airline over poor remunerations and controversial human resource policies. However, Mr. Ngunze was quick to reaffirm his confidence in the turnaround plan. He has asked all stakeholders to fully cooperate with the carrier as it endeavors to develop a long-term profitability structure and bring back its lost glory as the “Pride of Africa.”