Government to restructure Kenya Airways in a month

Restructuring loss-making carrier Kenya Airways will take a month, the government said on Wednesday, appealing to pilots to withdraw a strike notice and join discussions. Tourism Minister Najib Balala, who sits in a cabinet sub-committee tasked with reviving the partly state-owned airline, said a pilots’ strike would further harm the airline. Visitor numbers and earnings have sagged, after peaking in 2011, hurt by security worries stoked by Somali Islamist group al Shabaab’s attacks inside Kenya, in retaliation for the involvement of Kenyan troops in the conflict in Somalia. “By going on strike (pilots) are going to bring down the airline. It is not fair,” Balala told Reuters in an interview. Pilots complain of poor management. The airline is reducing the size of its fleet, selling non-core assets like land and cutting jobs to recover from the losses it incurred after tourism slumped. It has also said previously it requires fresh capital of 70 billion shillings ($700 million). The pilots’ union called the strike to press for the firing of the carrier’s Chief Executive Mbuvi Ngunze and the chair of its board, Dennis Awori. They say they lack confidence in the pair’s ability to drive its recovery. The minister said restructuring Kenya Airways, in which the government has a 29.8 percent stake and Air France KLM holds 27 percent, would be completed in a month. He did not give details. Ngunze said in September the airline was talking with three or four foreign parties about a potential investment in the airline. It ferries 12,000 passengers a day, many of them tourists, supporting a sector that contributes 14 percent of gross domestic product. Tea, horticulture and remittances from Kenyans living abroad are the other main sources of foreign exchange.

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