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AirAsia cuts 10% of 24,000 employees as fleet remains grounded

AirAsia cuts 10% of 24,000 employees as fleet remains grounded

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AirAsia has retrenched 10% of its 24,000 employees last week, according to CEO Tony Fernandes during a recent Buletin Utama TV3 interview. Fernandes said it has built a great company because of 24,000 great people and the airline has lost some of them through no fault of theirs.

"My responsibility is to try and get the airline back so they can come back or provide them other jobs," he said. Fernandes explained that With 80 out of 245 planes being able to fly at the moment, the airline has "too many staff". While the latest 10% job cuts are "far less than most airlines", Fernandes said it hopes this is the last. AirAsia declined to comment on A+M's queries.

In June, the airline also terminated more than 300 employees, according to a report by Astro AWANI. AirAsia Malaysia CEO Riad Asmat said then that the organisational restructure was a "viable alternative at present" due to the challenging situation.

Meanwhile, Fernandes also said in the interview that the government's PRIHATIN Rakyat Economic Stimulus package is "good enough for [the airline]" and that "it is not a bailout, that is a loan, and [it has] to pay back that loan". He addded that those saying PRIHATIN is a bailout is a loan. Fernandes also confirmed that AirAsia had sought funding of RM2 billion to RM2.5 billion. At the same time, The Star also reported last Friday that an American lender has expressed interest in loaning the airline US$1 billion for the digital assets that AirAsia has amassed over the years. Meanwhile just today, Nikkei Asia said the Malaysian government has approved a RM1 billion loan to AirAsia.

Its long-haul arm, AirAsia X, also recently proposed a restructuring plan to facilitate an injection of fresh equity which will allow the airline to fly again. The proposed plan includes a debt restructuring scheme, revision of the group's business plan, engagement with business partners and airline customer and travel agents. The airline added that it is facing "severe liquidity constraints" to meet debt and other financial obligations with no imminent return to normalcy.  

Separately, AirAsia realised its super app dream just last week by unveiling as ASEAN's super app, offering a simpler, faster and more convenient user experience with over 15 types of products and services under three main pillars - travel, eCommerce and fintech. Among the list of categories include flights, hotels, SNAP, activities, insurance, Big Rewards, unlimited deals and wifi. 

Join us on a three-week journey at Digital Marketing Asia 2020 as we delve into the realm of digital transformation, data and analytics, and mobile and eCommerce from 10 to 26 November. Sign up here!

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