Kenya Airways (KQ) cut its manpower from 3652 in 2020 to 3544 in 2021 to represent a three percent cut on the carrier’s payroll.
This was against the backdrop of the coronavirus pandemic that hit the airline.
The slashing saw employee costs fall to Ksh.12.71 billion from Ksh.13.619 billion in a similar period.
In the year ended December 31, 2021, the airline narrowed its losses to Ksh.15.8 billion.
This is was a drop of 56.58 percent compared to Ksh.36.2 billion loss it made in the same period the previous year amid the heightened COVID-19 travel restrictions.
Reports also show that Kenya Airways defaulted on interest for a Ksh.25 billion loan owed to the government in the year ended December 2021.
It did not make any payment for the loans that were taken in two tranches last year and in 2020.
Fist tranch was Ksh.11 billion which was taken in 2020 when carriers around the world were grounded due to the pandemic. The second tranche, Ksh.14 billion was in 2021.
“As of December 2021, the group and company had not made any payments of interest on the government of Kenya loan as set out in the loan agreements,” KQ says in its annual report for the year ended December.
According to Business Daily, the loans attract an annual interest at the rate of three percent which should be paid by June 20 over five years but the carrier sought for a waiver instead.
In February this year, the National Treasury presented the state budget supplementary estimates to parliament with a new grant of Ksh.26.5 billion to KQ.
Allocation to KQ constituted the highest of the Treasury’s extra spending, most of which was drawn from a reduction in marine transport projects at Ksh.15 billion.
“The reduction is on account of rationalisation of slow-moving projects,” Treasury Cabinet Secretary Ukur Yatani said, adding that KQ allocation is to help cater to the airline’s expenditures.
Further details reveal that KQ requires finances for the maintenance of grounded planes, payment of salaries and also the settling of required utility bills like security, water, electricity and parking and ease the effects of the COVID-19 pandemic that has affected travelling in the world.
The airline was at a risk of running out of funds in the future following the reluctance of banks in lending funds to African airlines.
This even as the government dropped the airline’s nationalization talks leaving it to rethink on how it would return to profitability.
The state was to take over the KQ liabilities, to the tune of over Ksh.240 billion and a Ksh.184 billion debt as of June 2021 and ease the burden on the entity’s daily operational needs.
But that remains suspended until further notice after the state withdrew the bill which was anchoring the transition of Kenya Airways into a wholly-owned parastatal.