Kenya’s loss-making national airline, Kenya Airways, plans to reduce its fleet and layoff over 1,000 employees as it restructures its operation to make it more lean and efficient, its chief executive said on Thursday.
The airline’s CEO, Mbuvi Nguze, said its board of directors were meeting to discuss a turnaround plan that will see $690 million in financing raised.
The third largest airline in Sub-Saharan Africa, After Ethiopian Airlines and South African Airways, has posted losses for the last three consecutive years. It announced the biggest ever loss in Kenya’s corporate history last year.
“As part of the airline turnaround strategy, all options are on the table. We acknowledge the need to significantly reduce our cost base in all areas,” Kenya Airways Human Resource Director, Alban Mwendar, told The Standard.
“For personnel cost, we will discuss with all the staff and unions where appropriate to find the best solution,” he added.
Kenya Airways has sold two Boeing 777-200 aircraft and will sell two more, and it’s searching for carriers to sub-lease four of its Boeing 777-300 planes for a period of four or five years, Bloomberg reported.
The airline, which is partly owned by Air France/KLM Group, sold its only slot at London’s Heathrow to Oman Air last month for a record $75 million.
Leading African airlines have in recent years struggled to remain profitable in the face of travel bans to the region over the Ebola virus scare in 2013 and other operational challenges.
Only Ethiopian Airlines has managed to grow its revenue and expand its routes to become the most networked carrier on the continent.
African Airlines are expected to post the lowest of profit growth this year of all regions, according to the International Air Transport Industry Association (Iata).
They are also expected to see the slowest growth among developing markets with capacity and demand expansion of 3.3 percent and 3.2 percent respectively this year.