* Airline cuts losses in first half of year
* Warns of damage of planned pilots’ strike
* Strike scheduled for next week (Updates with government warning)
By Duncan Miriri
NAIROBI, Oct 13 (Reuters) - The Kenyan government and Kenya Airways urged pilots to call off a strike planned for next week, saying it would be “economic and national sabotage” and hamper efforts to stem losses at the airline.
The carrier, 27 percent owned by Air France KLM, took the unprecedented step of publishing parts of its earnings early in response to the strike called by pilots’ union KALPA. . It halved its pretax loss to 5 billion shillings ($49.4 million) over the past six months thanks to a recovery in passenger numbers.
The government, which owns a 29.8 percent stake in the airline, warned the union against strike action, saying it would cause widespread economic disruption.
“The government will use all the levers available under law to take action against those who defy this directive,” James Macharia, the transport minister, said in a statement.
KALPA had said it has lost confidence in the ability of the airline’s CEO Mbuvi Ngunze and chair of the board Dennis Awori to end years of losses.
Kenya Airways said the first half numbers showed the claims were not true and that the strike risked hurting its recovery.
“The threatened industrial action called for by KALPA is unjustified and uncalled for,” it said, adding the strike fell outside the union’s collective bargaining agreement.
The union has called for an indefinite strike starting on Oct. 18.
Kenya Airways said it was already suffering from the effects of the seven-day advance strike notice issued on Tuesday.
“The threatened action is already costing Kenya Airways significant losses as passengers have begun to make cancellations,” the company said, adding it lost 200 million shillings when the pilots went on a day-long strike in April.
“If KALPA does not forthwith retract its statement, Kenya Airways will have to immediately stop selling tickets.”
Passenger numbers rose 4 percent to 2.23 million in the six months to the end of September while planes were 71 percent full on average during the period, a 3 percent improvement, the airline said.
Tourism numbers have been recovering while the airline has also benefited from a number of major conferences held in Kenya this year.
Kenya Airways, which carries 12,000 passengers a day in a fleet of Boeing and Embraer planes, has been hit in recent years by falling earnings triggered by a decline in the number of visitors to Kenya.
Tourism has been hurt by security worries stoked by Somali Islamist group al Shabaab’s attacks in the country, in apparent retaliation for Kenya’s military deployment in Somalia.
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.
“KALPA leadership and its membership should take note that taking part in any strike at KQ (Kenya Airways) during this very delicate stage in its recovery is tantamount to economic and national sabotage,” Macharia said.
KALPA said it still wanted the chief executive and the chair of the carrier’s board to leave despite the minister’s warning.
$1 = 101.2200 Kenyan shillings Editing by Alexandra Hudson and David Evans