Thursday, September 6, 2012

■ KENYA: Defying Odinga, Kenya Airways completes its redundancy drive.

Kenya Airways
Defying a directive (or request, depending on whose point of view you take) from Kenya's Prime Minister Raila Odinga, to cease its planned redundancy drive, Kenya Airways (KQ) today announced the successful completion of its Staff Rationalization programme with 126 employees choosing the early retirement option whilst another 454 were made redundant.

The move will save the company roughly USD10million, with the overall aim of reducing the employee cost base of USD160million by 10-15%, as the airline attempts to create a suitable platform for the planned growth of network and fleet over the next few years which is estimated to cost USD3.6billion financed with various bank loans.

During a press conference called in Nairobi this morning, Kenya Airways Chief Executive Officer, Titus Naikuni, explained the rationale behind the ongoing staff rationalisation:
Titus Naikuni
Titus Naikuni (StandardMedia)
“We followed the labour laws to the letter, and looked around at what is happening in the marketplace in Kenya and Africa and packaged the best and most fair deal for our employees,” said Dr. Naikuni. “Our programme is generous to those affected from both a severance and provident perspective. Those leaving the business will have an estimated average pay-out of up to Ksh. 2 million. Over the last few months the company has revisited cost structures, reviewed processes, increasing efficiencies in order to mitigate decline in profitability, whilst maintaining and growing customer satisfaction.”

According to the Kenyan Press, staff retrenchment packages have consisted of severance pay of 20 days for every completed year of service.