Airline, Workers Agree to 20 Per Cent Pay Rise

Kenya Airways management on Sunday sighed with relief after it reached a back-to-work agreement with the Aviation and Allied Workers Union, saving the company further losses.

After two days of the airline grounding its operations due to a strike by union members, the two parties agreed to a 20 per cent salary increase that will be staggered over two years. The airline also withdrew over 50 dismissal letters it had issued.

"The airline is a major player in international arrivals and had the strike lasted longer it would have frustrated potential tourists," Tourism minister Najib Balala said in a phone interview.

During a Press conference to announce the accord, however, Kenya Airways chief executive Titus Naikuni and AAWU secretary-general, Jimi Masege, said some issues were yet to be resolved.

These include job evaluations that will lead to a new structure for unionisable employees that will be completed by April next year.

The impasse between the airline and the union over staff salaries dealt the airline a major blow just as passenger numbers started to pick due to the high travelling season.

Mr Naikuni now has to clear the backlog of passengers who were left stranded in various points due to flight cancellations.

"We are not out of the woods yet as the backlog to West Africa is especially huge," he said.

The airline intended to mobilise its fleet, according priority to the hard-hit areas and regional routes that are the carrier's cash cow as soon as the workers resumed duties last evening.

Since April this year, the two parties have been in negotiations, with over 25 meetings being held. However, talks stalled last Thursday after the Union insisted on a 130 per cent pay increase, ten times the 13 per cent that the airline had put on the table.

The strike started on Friday causing nine flights to be cancelled with more being grounded on Saturday.

Though Mr Naikuni could not quantify the financial impact the impasse would have on the airline's business, it is expected the situation will have a significant impact on its revenues for this financial year.

The new agreement is expected to thin the airline's decreasing operating margins further due to an increased wage bill that is estimated to cost Sh900 million for the two years the collective bargain agreement (CBA) covers.

The amount includes basic salaries and allowances.

Currently the airline's wage bill stands at Sh5 billion.

The union had initially demanded a 130 per cent for its 3,465 members in the airline, 26 per cent of the wage bill, which could have seen the bill increase to Sh8.5 billion. The airline had initially offered an eight per cent increase.

The airline also suffered losses arising from revenue opportunities and compensating passengers inconvenienced by the strike.

Related terms: airline, business, cba, conference, kenya, revenue, salaries, strike, unions