Malindo Air refutes allegations it pocketed funds from Socso

PETALING JAYA: Malindo Air says that all funds that it received from the Social Security Organisation (Socso) have been fully disbursed to its employees.

In a statement, the airline said it did not retain any portion of these monies as alleged by certain quarters.

The airline explained that under the Employment Retention Programme (ERP), it received RM1,267,200 for April 2020, which was credited in mid-May 2020, from Socso and disbursed to 2,112 staff.

“Thereafter, a total of RM1,486,800 was received in late June 2020 and credited to 2,478 staff accordingly.

“Subsequently, when Socso discontinued the ERP and replaced this with the Wage Subsidy Programme (PSU scheme), only 196 employees benefited. A total of RM235,200 was received for the months of June and July 2020, which Socso only disbursed in late August and September 2020, respectively.

“Nonetheless, Malindo Air has ensured that the staff who benefited from both the schemes were retained for more than three months as per their governing rules, ” Malindo Air said Wednesday (Nov 4).

Prior to the Covid-19 pandemic, Malindo Air said that its average monthly revenue was RM200mil. This in turn supported a payroll of 5,000 personnel amounting to RM40mil a month.

Malindo Air CEO Capt Mushafiz Mustafa Bakri said the pandemic, which resulted in the grounding of almost all of its fleet since March, has had a crippling effect on the airline’s finances with current average revenue being just 7.5% of pre-pandemic levels.

“How do you continue to maintain status quo for eight months and still counting, when there is barely any revenue or meaningful support of any kind?” he added.

The airline also had to undertake a massive cost-cutting exercise in order to remain afloat due to huge erosion in its cash flows.

Malindo has downsized its fleet by 50% by transferring out 20 aircraft, which resulted in a monthly savings of about RM20mil, Mushafiz said.

The airline has sought deferments and renegotiated contracts with their vast number of service providers, including aircraft lessors and airports.

Malindo Air stressed that despite having taken numerous steps such as a voluntary separation scheme (VSS) and long-term unpaid (LTU) scheme for their staff, they are now having to resort to retrenching 1,861 staff in order to remain operational.

The airline said it is now working closely with Human Resources Minister Datuk M. Saravanan, Industrial Relations Malaysia director-general Khalid Jali, Labour Department, Socso and HRDF to assist all their displaced staff to be retrained and reskilled for onward job placements.

“Eight months on from the start of the pandemic and with no sight of any restrictions being lifted, borders being opened or the pandemic abating, air travel continues to remain in a state of flux globally, ” the airline said.

See also: Saravanan: Industrial Relations Dept received 31 claims for reinstatement involving ex-Malindo Air workers

On Tues (Nov 3), Human Resources Minister Datuk Seri M. Saravanan told the Dewan Rakyat that the Industrial Relations Department had received claims for reinstatement from 31 Malindo employees and 24 of these had been resolved amicably.

He also said, in response to a supplementary question from Kasthuri Patto (PH-Batu Kawan) that the ministry would be meeting the airline's management together with Socso and the Labour Department to discuss the matter of the RM3mil in funds given to Malindo to pay its workers.

"I will look into the issue to ensure these workers are protected as much as possible," he said.

It was reported that about 2,000 Malindo Air staff were retrenched recently as part of the airline's latest cost-cutting measure.

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Malindo , Covid-19 , Pandemic , Revenue , Socso , Funds


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