AFRICAN AIRLINES ARE MONEY MAKERS


Another avoided strike . The courts rules in favor of the Airline. Let’s see what happens in a few days.

In the industrialized world the Airline industry is a competitive and cut throat business.  However, I think that Africa fare better in that industry.

Air France/KLM with 580 planes is the biggest airline in Europe and maybe the world.  Flying is a comfortable experience in tune with their Sky Team slogan “caring more about you”
The planes are immaculate, the in-flight entertainment works and the food is good. The flight attendants are agreeable and well paid. The crew, on stop over, sleeps in the best hotels providing full board.  Staff grievance is through transparent and professional unions. The management does its best to work within the aviation guidelines.  The average starting salary of a flight attendant is about $25,000 per year to start and not exclusive of all added benefits while on duty.  It is a demanding but a lovely career to pursue.
Ask my cousin, she is so much in love with the company that she cannot wait for it to change sex so she can marry him. She works there and she is madly in love.

Kenya Airways, the pride of Africa, has 30 planes. They all receive basic maintenance but in-flight entertainment seldom works. The food is average.  The flight attendants are grossly underpaid.  The crew, on short stay, rest in planes or in good bed and breakfast hotel.
On staff grievances …hmmm… the Corruption Perception Index ranks Kenya 146 out of 180 countries and it is the most corrupt country in East Africa.  Look through the bush and not at the bush to reach the truth on staff grievance decisions.
The flight attendant average salary is so low that in the Western world, they would strike even before being hired. Of course, they have extra perks too.
However, warning! The working conditions, backed by a well paid, self-righteous and contemptuous, management, make this career a haven for people with masochist tendencies.

Now, let’s practice basic-101 financial analysis.
Kenya Airways made $60 million net profit for 2005-2006.  I cannot handle big money, so let’s break it down to about $12.5 million per quarter.
Air France/KLM group had a net $ 91.5 millions during the last quarter of 2005. Now let’s calculate;
– Kenya Airways 30 planes, divided by $12.5 million profit = $416.000 per planes.
– Air France/KLM 580 planes, divided by $91.5 million profit = $63,000 per plane.

Now, who makes more money, the African airlines or the guys from the West? 

Of course, I may have overlooked some tangible. As I said, it is basic-101 financial analysis. However, I am sure you understand the idea I want to project.  

Who cares if the plane ride is rough!  What matters is that passengers reach point B with or without luggage.
So what if the staff is poorly paid. That’s good management, it keeps staff on their toes, when tired they lose strength to complain.

These guys are smart. I understand that Kenya Airways, in 2009, had about 4300 staff with a total wage bill of $47 million. Now, learn and see how they divide the pie;
– The management – 400 staff – $16 millions
– The pilots – 340 flying aces – $17 millions
– The core – 3,560 hard-working braves – $14 millions

Isn’t a divide wider than the Great Rift Valley between the rich and poor? But that’s how you make money!  The core purpose is to sweat and pay the management big salaries.

When the flight attendants went on strike, everyone was up in arms when they asked for a 130% increase.
The Media who likes to babble about rights and wrongs of ridiculous high cost of living kept quiet. That’s absolutely normal, they have to muzzle up and go with the program.

The big wheels of Africa hire Public Relations which are well-connected with Governments. So let’s sit down and think for a moment;

“Do you want tea or coffee?”
“No!”
“Ok, then. So, as I was saying”…
The Kenyan government together with the Kenyan institutional investors own 37 % of Kenya Airways.  It is a big earning for the country.  
The PR companies are “sweet hearts” (is that really a metaphor?) with the Government.
The Media’s bread and butter come from the PR companies.
The Press Freedom Index in Kenya is not so good (96 out of 175). That’s the secret key for a good media coverage of labour disputes in favor of the management.
The Media publish incomplete truth subject to interpretation.
The result is a public totally confused and misinformed about what the raise is all about.

In those days the average basic salary for a flight attendant was $2,700 per year and 130% meant a raise to $6,200 and that’s only 1/4 of Air France/KLM basic salary.

Eventually, after a bus load of scare tactics, bit of time in cells, court letters, termination letters, mass intimidation by management and incomplete coverage by the media, the staff got a lousy 20% increase.

That’s how you make money and how the West should do it. All you have to do is let a PR Company run the show while the strike goes on.  You know, with press releases, little photo opportunities and one way conversation with a converted media. The West is too ethical, but sorry,  that’s what they must do to make money.

Yes, I know.  Air France/KLM owns 26% of Kenya Airways.  That’s because slavery is over and today the colonies don’t have much sugar cane to cut. Instead of moving the people to plantations, they moved the plantations to the people.  It is the reason for their 26% share. Africa knows how to control their cheap labor.  Air France/KLM is slowly learning!

Now, assuming the flight attendants strike again. Easy! here is a tactic; have a proxy company hire and train flight attendants with promises of a cheap salary. On the first day of a strike, the court declares it illegal, the company fires half the strikers, the new trained flight attendants get the job at a basic pay of 10 years ago and the Company is back in business with expected profit higher than the previous year.

That’s how you make money!

Patrick-Bernard

Advertisements

One response to “AFRICAN AIRLINES ARE MONEY MAKERS

  1. Hey! .. I love the blog, it is informative right to the end.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s