PETALING JAYA: Malindo Air is ceasing all flights this month and asking 70% of its staff to take no-pay leave.
That involves over 3,400 of its total 4,900 workforce. If the coronavirus (Covid-19) pandemic worsens with countries continuing to close borders and airspace, the no-pay leave situation will drag into May.
Malindo is the first local airline to ask the bulk of its workforce to go on unpaid leave.
However, Malaysia Airlines has also given its 13,000 employees an option to take five days of unpaid leave per month for at least three months, or between one and three months from April. It has approved 1,194 unpaid leave applications.
“We are ceasing all flight operations in April and foresee the situation to be the same in early May, ’’ Malindo chief executive officer Captain Mushafiz Mustafa Bakri said in a memo to staff.
He said “given these curtailments, we have had to re-look our manpower requirements as we are not generating any revenue to support the operations other than the few humanitarian flights we are currently doing’’.
Only those identified will “report for work and be paid on a daily wage basis for the work carried out on specific days. All others would be deemed to be furloughed with no pay.’’
Airlines across the globe are asking hundreds of their employees to go on no-pay leave or take pay cuts and do away with allowances. These are some of the cost-cutting measures undertaken by the airlines to stay afloat apart from grounding hundreds of aircraft and re-negotiating aircraft lease agreements.
Beginning this month, CGS-CIMB Research said in a note that AirAsia staff with salaries of more than RM4,000 a month have been asked to take voluntary pay cuts of between 15% and 100% depending on seniority and salary levels.
The founders of the company, Datuk Kamarudin Meranun and chief executive officer Tan Sri Tony Fernandes, will forego their salaries.All these salary cuts are indefinite in nature but assuming an average of 20% fixed salary cut, it will help the airline save RM300mil for financial year 2020, according to the report.
The senior team at Malaysia Airlines is also taking a pay cut.
Malindo’s Mushafiz said “we have made representations to the Finance Minister and remain hopeful that our appeal to the government for financial help to pay salaries will soon bear some positive response’’.
All the three airlines are hoping for some form of aid from the government to tide over the pandemic.
CGS-CIMB said AirAsia needs about RM1.6bil in new funding for two years and has cash to last it for some months.
As for Malaysia Airlines, Khazanah Nasional Bhd is said to be preparing some funding for the airline. Reports have also emerged saying that a new suitor in Golden Skies Ventures has made a US$2.5bil offer to fully take over the airline and has financing from an European bank.