Africa: Rwandair cuts staff salaries up to 65 percent shunning mass retrenchment due Covid-19 impact

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In order to ensure business sustainability, Rwanda’s national carrier- RwandAir has announced that it will cut the net salaries of its employees starting from 8 percent to 65 percent as it seeks to survive the coronavirus pandemic, an internal memo revealed.

According to the memo, the Kigali-based airline stated that the lowest paid employee will be subjected to an 8 percent cut while top earners will forego a huge 65 percent cut off. In the document headlined as ‘Notice To All Staff’ signed by the Chief Executive Officer of RwandAir Yvonne M. Makolo, the new measure was not only made to “avoid laying-off staff” but to prevent the airline from sinking into a massive loss.

In a statement released on Sunday, April 26, 2020, RwandAir disclosed: “This difficult decision was made after evaluating the stark options available.” Subsequently, the Management and Board of RwandAir affirmed that they will stand with all their employees during this time.

“We will continue to do everything possible to mitigate the effects of the pandemic and ensure the continued growth of the company once operations resume,” part of the statement read.

Earlier on, the East African airline implemented a forfeiture of the net salaries belonging to the CEO, DCEO, and all directors for the month of April 2020. It also extended the suspension of contracts for pilots and non-essential staff until further notice.

RwandAir, therefore, instructed employees to utilize their annual leave during this suspension period as communication allowances will be affected.

Additionally, Rwanda’s national carrier intends on renegotiating terms to reduce the company’s expenditure and financial commitments.

Furthermore, the airline has ordered the alignment of outstation staff salaries to the local payroll. Henceforth, Country Managers will be paid as Senior Managers, Station and Sales Managers will be paid as Managers, and station Officers will be paid as Duty Managers.

RwandAir has joined a growing list of airlines in the African aviation industry to announce far-reaching measures in order to sustain their businesses during the COVID-19 pandemic. In recent weeks, airlines around the world have been forced to implement tough decisions to mitigate the effects of the coronavirus. For Kenya Airways (KQ), the Chief Executive Officer Allan Kilavuka and other top managers have taken a 35 percent pay cut to preserve cash and cut costs amid the coronavirus outbreak.

International carriers have also reacted to the economic impacts of the global lockdown caused by the novel COVID-19 pandemic. For instance, Virgin Atlantic fired more than 3,000 personnel, including 600 pilots, Finnair returned 12 planes and laid off 2,400 people, and You grounded 22 planes and fired 4,100 people amongst others.

With an average of 5.8 crews per plane (medium and long haul combined), report shows that there are more than 90,000 unemployed pilots worldwide.

Inevitably, the salary-cut resolution made by RwandAir empathizes with their employees’ current state. Instead of outright dismissal, the airline decided to retain their positions in order to mitigate the effects of the coronavirus pandemic. Although the pay cut is set to have a significant impact on the workers and families associated with RwandAir, the settlement will ensure that employees are still taken care of during the COVID-19 outbreak.

Source: venturesafrica.com

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