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By Cathy Buyck - Kenya Airways confronts labor challenges

posted Oct 4, 2010, 12:03 AM by Temp User

Kenya Airways, facing a new strike threat by its employees represented by the Aviation & Allied Workers Union, appealed to the country's Central Organization of Trade Unions to "intervene and ensure AAWU does not deviate" from the terms of an agreement reached following a two-day strike in August 2009.

The "Return to Work Formula" agreement called for a 10% interim pay increase retroactive to July 1, 2008 and another 10% boost effective July 1, 2009, and the introduction of new staff allowances. The allowances agreement was signed in April and KQ paid allowances backdated to Oct. 1, 2009 amounting to KES129 million ($1.67 million). The union now wants this backdated by 15 months, to July 1, 2008.

"We have diligently adhered to all the agreements that we have signed with the union and there is no time that we have acted in breach of any agreement" said Kenya Airways Group MD & CEO Titus Naikuni, who described the union's demand as "unrealistic, unprocedural, illegal and unsustainable, as it would translate to an additional unbudgeted cost of KES325 million on the company’s wage bill."

KQ earned KES2.04 billion in its most recent fiscal year ended March 31 and operating profit was KES1.84 billion. Revenue amounted to KES70.74 billion, down 1.9% on the prior year, owing to the global economic crisis and a two-day strike by cabin crew, ground staff and engineers represented by the AAWU. It is in the midst of an ambitious three-year growth plan that calls for it to add one destination per month (ATW Daily News, Aug. 27 ). It currently operates to 50 destinations, of which 41 are in Africa.