Talked to KQ friends and they are happy about Rao's move.
Surprisingly!!
Aparently Naikuni and another politician have a stake in the firm that they want to outsource to!
Them think the problem is with Naikuni's management and not the wages..Plus they dont understand why the foreigners wont be Axed.
Good for shareholders,bad for employees esp those on mortgages

Am a shareholder and if KQ doesn't improve it's performance I will be worried about my mortgage too.Their wage bill needs to be cut.

@Maich, some people think investors start companies to create jobs. Nah,that's why they get robots when they can. Objective is to produce goods and services at the lowest cost to enable them turn a profit. Naikuni has to fire some people or loose his job. If he can't someone else will. Raila is a businessman and would have been out of business reasoning like that, just playing populism as usual.

naikuni should lead my example and resign for ruining shareholder value. 24% increase when the company has made a 50.1% drop in profit. this is insane.

@mukiha: KQ's core functions are selling airline seats for their various routes. Everything else from food service to baggage handling and aircraft cleaning are non-core. However, it depends on the strategy of the airline. Some airlines pride themselves in exemplary cabin service as their competitive advantage. KQ cannot claim this as their competitive advantage.

As much as I agree with you that it would not be a good idea to outsource the cabin crew, it can be done in a tactful way. The practice is that any function that involves repetitive tasks can (and should) be outsourced to specialists to allow the business to concentrate on core functions. For an airline, the cons outweigh the pros for outsourcing cabin service. Airline staff (in general, not KQ in this case) understand the value of their jobs for the airline's image and competition with other carriers. This attitude might be different for outsourced staff who more often than not will be on very low salaries.

My view is that any shareholder should be in support of this exercise. KQ will have explored other ways of maximizing shareholder value by cutting costs and determined that this is one of those ways.