Sections

ideals
Business Essentials for Professionals



No Salary For Malaysia's Airasia Founders While Staff Accepts 75% Pay Cut


09/05/2020


No Salary For Malaysia's Airasia Founders While Staff Accepts 75% Pay Cut
While the staff of Malaysia's AirAsia Group has agreed to take a salary cut of as much as 75 per cent, the founders of the company have also decided not to take salaries in order to reduce expenditure in the wake of crash in the airline industry due to the novel coronavirus pandemic, said the company’s chief executive said late on Saturday.
 
According to an Instagram post by Tony Fernandes, he and Executive Chairman Kamarudin Meranun "will not be taking a salary during this period", while staff from across the business "have accepted temporary pay reductions of anywhere between 15-75%, depending on seniority, to share the impact this is having on our business".
 
Fernandes said that 96 per cent of the aircraft of the airline was grounded and no incoming revenue was available to the budget airline because of the pandemic.
 
"We still have significant ongoing financial commitments such as fuel suppliers and leasing agents," he said.
 
All of the employees of the airline have however been retained by it.
 
The airline has also requested its customers not to take refunds for cancelled flights and instead urged them to accept credit offers for the cancelled flights.
 
Since March, most of its flights have been suspended by AirAsia and most of the aircraft of the company’s long-haul arm, AirAsia X, have been grounded at its Kuala Lumpur hub until May 31
 
In an announcement a day earlier on Friday, AirAsia X said that a claim against the company for $23 million in outstanding dues has been filed by lessor BOC Aviation. Allegations of a breach of AirAsia X’s lease agreement and of the obligations of the airline under four guarantees dated December 2018 has been placed by the lessor, the budget airline said. It added that legal advice to the development will be sought by the airline after its board conducts a review of the agreement documents.
 
Travel restrictions triggered by the novel coronavirus pandemic and the related slump in air travel have hit AirAsia X severely in terms of revenues.
 
The airline said last week that support from its creditors was needed by it for it to tide over the pandemic crisis. The company was also negotiating with suppliers, lessors and lenders for payment deferrals and concessions,
 
In the April-June quarter, only 16 scheduled flights were operated by the airline as it carried 2,291 passengers. In comparison in the same period a year ago, the airline had operated 4,824 flights and carried about 1.45 million passengers.
 
Plans to raise more capital is also being contemplated by AirAsia X’s parent company the AirAsia Group.
 
Four planes from BOC Aviation have been leased by it, AirAsia X said. The lessor has filed the claim at the High Court of Justice in the business and property courts of England and Wales, it said.
 
(Source:www.nasddaq.com & www.reuters.com) 


In the same section
< >