To me it's different if he used the K word to the guy's face, but it was done in "private", on the flight deck, and the guy over head it through the intercom via the hot mike. He also apologised immediately, but the guy wrote a report about it nevertheless.
Reminds me of living in a communistic country, where you can't use certain langauge against the party in power, for fear of losing your job or your life.
I agree totally though, that the K word is an ugly, outdated word. The irony though, and maybe if there are any from our black community on here can confirm this, but I've heard blacks sometimes call each other the K word.