AirAsia Group's management and senior employees have volunteered to take a pay cut, ranging from 100% at the very top to 15%. This is in effort to further manage and contain costs for the airline company. AirAsia said the pay cut will help ensure it can ride out this prolonged period of extremely low travel demand. It also aims to help minimise the impact on its employees, especially those in junior positions.
This comes as AirAsia takes a hit from the COVID-19 global pandemic, which has seen drastic travel restrictions implemented around the world. In response, the airline is temporarily hibernating most of its fleet across the network due to the "extensive and increasing border restrictions imposed by various countries" since the COVID-19 outbreak. All short-haul flights to Malaysia, Philippines, India are temporarily suspended, while domestic flights to Thailand and Indonesia will continue at a reduced frequency. All medium and long-haul flights to Thailand are also suspended for three months.
"We believe this temporary fleet hibernation is the right thing to do to ensure the well-being of our guests and employees," AirAsia said. It added that the well-being of its guests and employees will remain as the top priority of its business during this challenging time.
Earlier this month, AirAsia put in place a range of cost containment measures across all its business operations in light of the COVID-19 outbreak. According to the airline, the measures place emphasis on minimising impact on its employees, while ensuring business continuity with a priority on flight operations safety and security. The cost containment measures was said then to have zero or minimal impact on most AirAsia employees, especially those in the lower-income bracket.
Amidst the protective measures that the company is taking, AirAsia also recently reinstated Tony Fernandes and Kamarudin bin Meranun to their executive positions of CEO and executive chairman respectively. Fernandes and Kamarudin were previously removed from their positions in February this year after AirAsia and AirAsia X were alleged to have accepted a bribe of about US$50 million from Airbus as sponsorship for a sports team. In a LinkedIn post, Fernandes said: "Being let down by a partner that you felt was family hurt a lot. Sponsorship was always about building a great brand and no one can deny AirAsia has built a great brand."
AirAsia joins airlines including Malindo Air, Malaysia Airlines (MAB) and Singapore Airlines (SIA) in reducing its employees' pay amidst the COVID-19 pandemic. Earlier this month, Malindo Air reportedly requested for its staff to take pay cuts as well as unpaid leave. Meanwhile, MAB allegedly reduced the pay of its senior management by 10% beginning March, The Edge reported. SIA has not only reduced its senior management's pay but also implemented a hiring freeze last month as travel demand plummets.
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