Airasia trims costs to ease impact of virus on business

Airasia, the largest low-cost carrier in southeast Asia, has implemented a cost-reduction initiative to minimize the impact of the coronavirus disease 2019 (Covid-19) on its operations.

However, the company maintained that it continues to pay members of its staff, who have agreed to a pay cut.

Tony Fernandes, the group’s bigwig, said his group may suffer financially from the virus, as 96 percent of its fleet have been grounded across Asean airports, including the Philippines.

“There’s no denying that our industry has been hit hard, and

we are no exception. This is possibly the biggest challenge we have ever had to face. We have no revenue coming in, 96 percent of our fleet is grounded and we still have significant ongoing financial commitments such as fuel suppliers and leasing agents,” he said.

Despite this, Airasia continues to pay its employees, albeit lower than their usual salaries. Pay cuts are between 15 percent and 75 percent. Airasia employs “tens of thousands” of airline workers.

“Allstars [Airasia employees] from across the business have accepted temporary pay reductions of anywhere between 15 percent and 75 percent depending on seniority, to share the impact this is having on our business,” Fernandes said.

He added that cost-cutting initiatives are in place to ensure that Airasia will continue to pepper the skies with its signature red planes.

“We are doing everything possible to reduce costs during this time so we can come back fighting as fast as possible and continue to be the world’s best low-cost carrier, enabling everyone the ability to fly with our great value and service,” Fernandes said.

At home, Airasia Philippines has 24 grounded planes and all of its flights have been canceled so far.

“Our focus right now in operations is cargo and recovery flights,” David de Castro, Airasia Philippines communications officer, said in a phone interview.

For now, affected customers may either get a refund from their booking requests or receive travel credits.

Fernandes encouraged guests to accept the travel credits as they are faster to process.

“More than 80 percent of you have accepted our credit offer and we truly appreciate this. Please know that our policy is in line with many operators in the travel industry and reflects our focus on coming out the other side of this difficult period and flying with you again as soon as possible,” he said.

Travel credits are valid for a year and allows guests to rebook their flights for an unlimited number of times.