July 06, 2020: Kenya Airways (KQ) plans to reduce its network, get rid of some assets and lay off an unspecified number of workers due to the coronavirus crisis, its chief executive officer Allan Kilavuka said in an internal memo dated July 3, as reported by Reuters.

It was struggling long before the outbreak, posting 2019 losses of almost 13 billion shillings ($122.2 million).

The coronavirus crisis has hit the global aviation industry hard, with African carriers alone expected to lose $6 billion this year in revenue.

“Our short and medium-term projections indicate that we must inevitably reduce our operations before we begin to scale up again,” Kilavuka wrote in the memo, adding that the exercise will be completed by September 30.

In November 2019, Kenya’s National Treasury planned to close the buyout of the carrier by the end of 2020.

It cut salaries by as much as 80 percent when the crisis started, and sought a government bailout to help it take care of running costs after it grounded its planes when Kenya stopped commercial passenger flights to curb the spread of the virus.

Michael Joseph, the airline’s chairman, said the decision to lay off workers and reduce operations was not informed by the failure to secure a bailout.

On July 3, the Nairobi bourse suspended trading of Kenya Airways shares for three months, citing the government’s plan to restructure the carrier, after it submitted to parliament a bill on the nationalisation of the airline.

KQ is 48.9 percent state-owned, 38.1 percent (lenders), 7.8 percent (Air France-KLM), 2.4 percent (Kenya Airways) employees, and 2.8 percent (individual investors).

Read Full Article