The airline industry has long been in soup due to the novel coronavirus outbreak. But things got even worse for the sector post the governments imposing nationwide lockdowns and travel-bans. It is being predicted that if the lockdown gets extended any further, several budget carriers will have to file for bankruptcy.
In an attempt to sustain their businesses and prevent cash-burn, airline companies have now resorted to tough measures like sending employees on furloughs and cutting salaries.
Joining the likes of other airlines, Indonesia’s flag carrier Garuda Indonesia recently announced its decision to cut employee salaries by 10 to 50% from April to June.
Company President Director Irfan Setiaputra said that the company resorted to salary cuts in order to maintain business sustainability as the coronavirus pandemic has hit the industry hard.
In an official statement, Irfan wrote, “We can assure that the salary cut is a postponement. The company will pay back the accumulated difference when it is able to, depending on our financial performance in the future.”
“Meanwhile, the Idul Fitri THR [holiday bonus] will be paid for in accordance with prevailing government regulations,” he added.
The different salary cut slabs will be dependent on the level of employee position in the company. The company said that the Board of Directors and Commissioner will face the highest cut of 50%.
While the salaries of Vice President, Captain, First Officer and Flight Service Manager will get a 30% cut, Flight Attendants, Experts and Managers will see 20% of their salaries cut. Other staff members such as Analysts and Officers will get a 10% cut.
“This decision was based on thorough consideration given the company’s current condition, which we believe we can survive — this period is not good for the entire aviation industry,” Irfan said.
Garuda Indonesia has cut 30% of its flights. Irfan previously said the company did not have any plans to lay off its employees, focusing instead on cost-efficiency measures.
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