Kenya Airways asks state to help it with growing competition

Kenya Airways (NSE:KQ) seeks protection against rival airlines operating flights to its Moi International Airport, Mombasa and Jomo Kenyatta International Airport in Nairobi.

This is in the wake of fresh competition as the government intends to grant 20 additional African and European airlines the green light to offer direct flights from Kenya.

The Kenya Civil Aviation Authority (KCAA) looks to issue immediate licences to the 20 airlines and has given a 21-day window period for stakeholders to give their views on possible effects of opening up the skies to the airlines.

“We started out these negotiations both with KAA (Kenya Airports Authority) and ourselves and the government to see how we can better protect us,” Kenya Airways Chairman Michael Joseph told reporters. “We don’t want to close our airspace,” he added.

Furthermore, the National Carrier is facing high staff turnover especially by pilots in the last two years who are decamping to competing wealthy Middle East carriers who pay better salaries.

This leaves KQ to operate below the ideal number of pilots needed for seamless flight operations (KQ has 434 pilots instead of the required 444).

Kenya Airways has been in and out of court with its pilots who from time to time hold a go-slow disrupting operations in the firm due to inability to come to a conclusion in remuneration negotiations.

The company however, looks to hiring qualified direct entry pilots from the Kenyan market to close the gap in staff shortage as well as revise their pay model using a productivity based pay system.

This comes at a time that Kenya Airways is aiming to cut costs whose large percentage lies in the wage bill (In FY17, KQ cut its wage bill by 15.9 percent y/ y).