KQ CHALLENGES

KQ blames pilots' union, CBA in operational hitches

Pilots can be absent for up to 48 hours without providing any medical evidence

In Summary

• KQ is reported to have delayed 40 per cent of the successful flights in the first seven months of 2019.

• Pilots, who enjoy the terms of the CBA, have been calling in sick a few hours to take-off without any explanation.

Outgoing Kenya Airways CEO Sebastian Mikosz during an interview on Thursday, September 5, 2019.
Outgoing Kenya Airways CEO Sebastian Mikosz during an interview on Thursday, September 5, 2019.
Image: VICTOR IMBOTO

National carrier Kenya Airways is now blaming its pilots' union and the existing Collective Bargaining Agreement (CBA) for its operational woes.

The carrier has recently suffered numerous flight cancellations and delays.

Pilots, who enjoy the terms of the CBA, have been calling in sick a few hours to take-off.

Under the CBA, pilots can be absent for up to 48 hours without providing any medical evidence. The agreement also limits Kenya Airways management from hiring more pilots and flight crew, which has forced it to operate with limited staff.

KQ is said to have delayed 40 per cent of the flights in the first seven months of 2019. The cancelled flights cost the airline Sh118 million. The cancelled flights were 52 in the first 18 days of August alone.

"The cancellations are due to the fact that we expanded the network with the same fleet. We flew more during the high season. We are at a point where the CBA gives so many rights and so much complexity that you cannot crew properly,” CEO Sebastian Mikosz told the Star in Nairobi yesterday.

“I dont know any group in Kenya where you can call in sick and not bring any certificate and not just come to work.” 

The CBA limits the national carrier from getting additional pilots to meet the expansion needs.

In the first six months of this year, KQ expanded its network by 17 per cent, flying about 150,000 more people year-on-year.

“We need more pilots; we need more flexibility. I don't think the shareholders want us to protect one group of people but I think we should create more jobs, hire more people and create stable revenue jobs,” Mikosz said.

 

The management has been on an on and off stalemate with the Kenya Airline Pilots Association (Kalpa) which constantly pushes for better terms "despite being among the best paid in the continent".

The Kenya Aviation Workers Union (Kawu) has also been at loggerheads with management on a number of issues including investment decisions, derailing implementation of key programmes.

Mikosz said pilots' salaries account for half the salaries at the airline.

“Kenyan crew is paid the same with Emirates. They are well paid. Some of the pilots' take-home salary is slightly below mine but nobody is talking about that,” he said as he defended claims that he takes home huge packages despite the airline making losses.

According to the CEO, the CBA needs to be revised to include the interest of the airline if KQ is to forge a profitable way forward.

“The relationship with pilots is one of the most complex elements of running KQ. On the one hand, we have pilots who are really good in terms of quality of work and availability but they are very difficult because they are not inclined to change. They are inclined towards the union,” Mikosz said.

KQ has 394 pilots and 65 captains flying tasked with flying a fleet of 40 aircraft.

During an investor briefing in Nairobi on August 27, KQ chairman Michael Joseph called for a review of the CBA.

“It is not a secret we have a rigid CBA on workers as we would need some flexibility on expansion,” Joseph explained. “We had to accommodate more operations, flights, in limited infrastructure hence delays being witnessed.”

The management has also blamed poor infrastructure for delays.

KQ is struggling with losses amid operational costs which have continuously affected its revenues.

It is not a secret we have a rigid CBA on workers as we would need some flexibility on expansion.
KQ chairman Michael Joseph

The airline recorded a 15.6 per cent jump in total operating costs to close at Sh61.5 billion, up from Sh53.2 billion a year earlier.

The operational costs ate into gains made on the total income which had gone up 12.3 per cent to Sh58.6 billion compared to Sh52.2 billion same period in 2018.

These includes revenues from new routes such as New York , Libreville , Mogadishu which were opened in the second half of 2018, which according to the management, they helped increase passenger numbers by 6.6 per cent to hit 2.4 million.

Passenger revenue grew by 5.8 to Sh42.6 billion. Total assets during the period stood at Sh212.4 billion up from Sh136.6 billion.

“The current CBA is extremely beneficial to our employees. It generates very high costs but first of all generates very complicated recruitment process and is hampering our growth,” Mikosz told the Star, calling for dialogue to review the current terms.

“I believe we have to expand the airline, expand market, lower our unit cost and have a turnaround future,” he said.

During the first half, KQ continued its network expansion drive, opening key strategic routes - Rome, Geneva and Malindi and increasing frequencies to other key destinations.

The New York-Nairobi route launched in October 2018 has shown a positive passenger uptake, according to the management despite remaining a loss-making route with prospects of picking up.

The growth in passenger numbers is highly attributed to codeshare agreements that enable passengers to connect to other destinations in the US.

The group continues to invest in improvement of operations, efficient network growth and improvement of service quality and delivery, according to the airline's board.

“In the next half year, the board and management are working on a fleet refinancing programme, which once completed will improve the group’s cash flow. The impact of this programme on the group’s financials will be announced to the public once the programme is approved for implementation,” Joseph said at a recent briefing.