PETALING JAYA: It has been a turbulent ride for the aviation industry and even as the year draws to a close, there are still no proper signs for airlines to see their businesses take off successfully.
With the emergence of a new Covid-19 strain that is 70% more transmissible and renewed lockdowns, expectations of borders reopening on the back of successful developments of vaccines may seem far-fetched now.
In Malaysia, one of the major casualties from the economic fallout is AirAsia X Bhd, the long-haul arm of low-cost carrier AirAsia Group Bhd, which has been laden with debts and loss-making operations pre-pandemic.
Almost its entire fleet of 39 Airbus A330s has not hit the skies since the hibernation of aircraft in March due to movement and border restrictions.
It has embarked on a restructuring process that was announced in October to resuscitate the airline by seeking for a 99% haircut for its RM63.5bil or debts, only to be slapped with lawsuits from its creditors that may potentially see the final nail hammered into the airline.
More than AAX, those that are feeling the scorching heat are its employees, all of whom are eager to fly and get back to work again.
Two retrenchment exercises in April and October saw the group laying off 1,157 employees, more than half of its pre-Covid headcount of 2,288.
This comprised 119 pilots, 670 cabin crew and 368 other staff members.
Out of the 1,131 remaining workforce, only 42 are active crew members. A total of 618 were furloughed while 471 other staff members are currently receiving pay cuts.
Capt Navinder Singh Nagreh, 35, a pilot and an instructor at AAX, was one of those put on furlough. He has since taken on a marketing gig to make ends meet.
“We have captains baking cookies, becoming Grab drivers and others, just trying to earn a living to survive.
“Forcing AAX to liquidate does not affect just the 2,000 odd people that were employed by the company. Take an average of four people per family, that’s at least 8,000 people that will be affected, ” he told StarBiz, adding that he is the sole breadwinner for his family of seven.
Ultimately, Navinder hoped to start flying again when the borders reopen after the pandemic subsides.
He said AAX employees still received their basic salary when the movement control order (MCO) was enforced in March but this was gradually reduced to 50% in June or July and then to 25%.
“The company has really helped us and they pushed as far as they could to pay us even with zero flights, ” he said.
Krystal Yeoh, 31, was retrenched on Nov 1 after four months of unpaid leave.
Like most of her colleagues who suffered the same fate, the former senior first officer (SFO) has taken on jobs as a digital marketer, started selling ice cream as an agent and co-founded a small business called D’LittleButcher with a fellow retrenched SFO to sell homemade Penang lor bak (five-spice pork roll).“Even pre-Covid, it was already difficult to get a job without a degree. What is worse now is the reality of competing against those with qualifications, leaving pilots with only a Commercial Pilot’s License (CPL) pretty much nothing except our dedication and hope to fly again.
“I love my job as a pilot, but being a part of AirAsia is beyond that. It has shown me that a company can be a family and as an Allstar, I was happy, content and it encouraged me to dream big.
“I have not given up being a pilot. This could be a hiatus and I am waiting for the situation to recover, for the industry to recover and to stabilise, ” she said.
Before joining AAX, Yeoh was also a SFO and a crew management resource (CRM) instructor at AirAsia Malaysia.
Senior cabin crew Mohamed Hazuddin Mohd Som, 41, is also under furlough, receiving only 25% of his basic salary of RM1,700.
He said the income of a cabin crew came mainly from flying allowances.
He has taken on various odd jobs since March such as being a real estate agent and even took on hard labour jobs such as renovation, panting, moving goods and also being a part time Grab driver.
“Whatever that comes by which allows me to sustain myself, I will do it. AAX has been trying its best to pay us and to keep us afloat.
“I have been working as a cabin crew for 22 years and it’s just something hard to swallow to lose our jobs just like that, ” adding that he has an 80-year-old mother who is still working as a condominium manager.
To start putting its staff up in the skies again and to get the airline running hinges solely on how AAX would manage its restructuring scheme, barring any prolonged lockdowns.
A written submission dated Dec 19 to the Kuala Lumpur High Court by Malaysia Airports (Sepang) Sdn Bhd (MASSB) that was sighted by StarBiz stated that AAX is saddled with Astronomical debts amounting to approximately RM63.5bil and it is one the clearest example where it would be against public policy to approve any scheme to be undertaken by a hopelessly insolvent company.
The wholly-owned entity of Malaysia Airports Holdings Bhd (MAHB) filed a RM78.16mil lawsuit against AAX on Oct 22 for various aeronautical charges, mostly made up of passenger service charges (PSC).
It then filed an application to intervene and be excluded from the restructuring scheme, saying that it is a secured creditor of AAX, which AAX eventually obliged and classified MASSB as a “Class A” creditor, or creditors who are considered critical or essential and who may have secured and other rights, in its revised restructuring scheme.
MAHB had previously said that the lawsuit would not derail AAX’s restructuring scheme.
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