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Time for KQ to review its 2017 CBA with the pilots for sustainability – Business Daily

Kenya Airways CEO Allan Kilavuka. PHOTO | DIANA NGILA | NMG
Notably, many professionals struggle with quantifying their value when it comes to remuneration negotiations and Kenya Airways pilots are some of them. They have withdrawn their labour, outlining demands regarding what management needs to commit to implementing.
At one of the pressers, they offered their own recovery plan for the airline, proposing that the management and board of the airline should reflect the economy by having representatives from across sectors like tourism, horticulture, meat exporters and others.
They took issue with the current management being solely focused on revenue generation.
The pilots ought to be informed that for a private company like KQ, the management are in office to represent the interest of shareholders. If they want to drive the strategic plan of the airline, then they should acquire the majority stake and take control of management.
So, for now, their false sense of entitlement of dictating the airline’s strategic direction is misplaced. But pilots digging deep points to a tactic to avoid a review of the 2017 collective bargaining agreement (CBA).
Before the CBA was signed, data from IATA (2015) showed that KQ pilots were among least productive by industry standards looking at their flight hours, excluding leaves, sickness and trainings.
For example in a comparison with Ethiopian Airlines, a KQ pilot has 38 percent less flight hours. But two years later, KQ pilots were awarded a 17 percent salary increase after the signing of the CBA.
A KQ first officer now earned around Sh900,000 and a captain Sh.1.6 million.
KQ pilots, who represent only 13 percent of the workforce, were gobbling 46 percent of the airline’s total payroll, and management never bothered to raise the productivity concerns.
Despite that, the CBA also allowed pilots to call in sick and report back without a doctor’s report, aggravating the low productivity problem of KQ pilots.
How could KQ management enter such a CBA? The airline got the short end of the stick at a critical time when it was doing its first restructuring programme and needed to be more concerned about sustainability.
During the restructuring, the KQ management withdrew from the Provident Fund, a voluntary pension fund where employees contribute 10 percent of their salary and the employer matches the contribution, affecting all the airline staff.
It was costing the airline Sh700 million a year, with the pilots’ contribution taking 40 percent. For their retirement security, KQ management should reconsider reinstating the Fund, but pilots have to forego some perks so as to save the taxpayer more burden.
Its time to review the 2017 CBA or freeze some benefits until when the airline can afford them in the interest of the airline’s sustainability and also taxpayers who bail it out every year.

source

Author

Joseph Muongi

Financial.co.ke was founded by Mr. Joseph Muongi Kamau. He holds a Master of Science in Finance, Bachelors of Science in Actuarial Science and a Certificate of proficiencty in insurance. He's also the lead financial consultant.