MANILA, Philippines — Billionaire Lucio Tan’s aviation support company MacroAsia Corp. is allowing some of its workers to go on unpaid leave as the new coronavirus (COVID-19) pandemic wreaks havoc on the airline sector.
MacroAsia, which provides airline catering, airport ground handling and plane maintenance services, said in a Philippine Stock Exchange filing on Monday that it implemented a “rotating voluntary no-work, no-pay schedule across all pay grades” starting today, March 16, 2020.
Moreover, a voluntary early retirement program will be implemented “with no premium offered to those who are availing.”
MacroAsia, including subsidiaries and associates, employs 12,315 workers.
A MacroAsia official told the Inquirer they are still finalizing the number of workers who will go on unpaid leave. So far, there were no job cuts on the table, the official said.
“We expect flights to resume,” the official said. “The airport will open after this virus is addressed.
MacroAsia is a sister-company of Philippine Airlines, which cut 300 jobs last month on mounting financial losses.
The company’s announcement underscores the huge impact COVID-19 is having on the aviation sector as demand dries up and countries and even individual cities erect travel bans to slow the spread of the virus.
In its filing, MacroAsia imposed a 10 percent pay cut for managers of the listed parent company and some subsidiaries to “help save jobs.”
MacroAsia’s top four executives were estimated to receive a combined pay of P26.22 million last year, its 2018 annual report showed.
MacroAsia has also halted hiring outsourced workers in airports where volume had dropped.
“With the recent pronouncement of the government on domestic travel ban, a retrenchment program on a LIFO-basis is being considered as a last recourse,” MacroAsia said. LIFO, or last in first out, is a rule where the newest employee is the first to be let go.
Operating expenses are being reduced as night-shift work is minimized. Utilities expenses, including rates are being reviewed. Discounts for some recurring high-value, high-volume consumption items were sought from supplier-partners for a limited period.
The COVID-19 is already taking a heavy toll on MacroAsia’s bottomline. The company said expected revenues from February to April this year will decline by P867 million.
This is already 13 percent lower than its original forecast, meaning it will likely miss its full-year target of P6.8 billion in revenue for 2020. MacroAsia added that forecasted net income will drop by P174 million during the three-month period.
“The length of this COVID-19 pandemic cannot be predicted however, such that a three-month impact period is being used for financial forecasting purposes only,” MacroAsia said.