COVID-19: RwandAir in Massive Salary Cuts

RwandAir has announced more salary cuts for its top and junior staff in what a senior official described as one of the “stringest measures” to “decrease company expenditure and protect the future well-being of the company.”

The Airline’s Chief Executive Officer, Yvonne Makolo told staff in a memo dated April 24 that since RwandAir has “lost all revenue streams yet we are required to sustain the airline’s direct costs to keep the business running,” there will be “net salary cuts depending on the current salary structure/grading.”

The cuts will range from 8% to 65% off the net salary with the lowest paid getting the 8% cut and the highest getting the 65% cut.

Recently, the loss-making Airline decided that to cut costs, the Chief Executive Officer, Deputy CEO and all directors would forfeit their net salaries for the month of April.

Makolo said non-essential contracts and most communication allowances would be suspended until further notice.

All staff were also directed to utilize their annual leave during the suspension period.

However, according to Makolo, these measures were not enough.

“Management has therefore come to a difficult but necessary conclusion that, in order to maintain the current workforce, more stringent measures are required,” she said.

Rwanda recently grounded all its aircrafts in the fight against Coronavirus.

Makolo said RwandAir had decided on the alignment of outstation staff salaries to the local payroll/country managers to be paid as senior managers, station and sales managers as managers and station officers as duty managers.

“This was an extremely tough decision and we understand the impact this will have on you and your family. However, please know that we considered several other alternatives and the choices we made, is the best option at this time,” said Makolo.

The Rwandan leadership has been looking for investors to buy a stake in RwandAir which has been struggling with losses.

Qatar Airways In February announced plans to buy a 49% stake in RwandAir.

The Rwandan national carrier operates a fleet of 12 aircraft offering service to 29 cities in Africa, the Middle East, Europe and Asia.

It recently started flights to Guangzhou, China and was readying for new routes to the U.S.

The airline is in its 11th year running having not registered any profit since it first commenced operation back in 2009.

The airline has been surviving on state subsidies that total to just over two percent of the country’s total GDP, keeping in mind the country’s per capita income is less than $800 and has a total GDP of $10 billion.

The airline is reportedly used by the national government to facilitate tourism growth that grows at an annual rate of 9.66 percent.