COVID-19 casualty: AirAsia to lay off 12 percent of workers

Budget carrier AirAsia Philippines is laying off hundreds of workers by the end of this month as the COVID-19 pandemic is forcing the airline industry to shift to survival mode.

The Inquirer learned that AirAsia Philippines, part of Malaysia-based AirAsia Group, has decided to cut its workforce by 12 percent. This will translate to about 260 jobs out of its 2,200-strong workforce.

“The aviation industry has been hit hard by the COVID-19 pandemic. AirAsia Philippines is not an exception to this,” the company said in a statement.

“Despite all our efforts to curb the effects of the pandemic, AirAsia has made the difficult decision of reducing the company’s workforce,” it added.

A company source with direct knowledge of the matter said the layoffs will be “across the board” and will include administrative staffers and cabin crew members.

It follows earlier efforts by AirAsia Philippines to cut costs as it started feeling the impact of the pandemic in the first quarter of 2020.

AirAsia Philippines senior management last April went on voluntary unpaid leave while the company cut its operating budget for the year by around half. Managers also took a pay cut to “minimize the impact on our employees.”

AirAsia Philippines is the latest domestic carrier to downsize its workforce. Earlier this year, Philippine Airlines and Cebu Pacific laid off almost 500 workers.

They later warned that more cuts were on the way if demand for air travel failed to rise from its sickbed.

Local carriers have shuttered regular flights starting last March after strict lockdown measures were imposed across the country. Flights resumed this week after rules relaxed in their main hub in Metro Manila beginning June 1.

Airlines are now gradually restarting operations amid uncertain demand.

But worsening the situation are inconsistent guidelines between the national government and local government units that control the locations of airports around the Philippines.

This forced airlines to cancel flights or scramble to revamp their schedules. Moreover, hundreds of passengers who have been stranded in Metro Manila for months are still unable to return to their home provinces because of confusing rules.

AirAsia Philippines is part of Air Carriers Association of the Philippines, which is lobbying for the passage of a law that will allow the industry to access financial assistance like emergency loans.

“We are working with our regulators and Congress for the swift passage of the economic stimulus laws to address the adverse impact of the COVID-19 pandemic on the aviation industry,” AirAsia Philippines chair Joseph Omar A. Castillo said in a text message on Friday (June 5).

“Our company remains confident that the air travel industry, as well as the economy as a whole, will bounce back,” he added.

The aviation industry is one of the hardest hit sectors in the continuing pandemic. Carriers are now rolling out new safety protocols and more stringent hygiene rules to win back flyers.

The International Air Transport Association earlier estimated losses from Philippine carriers and tourism at $4.48 billion, while job losses could reach 548,300 this year alone.

The government reported on Friday that the jobless rate climbed to a record high last April at the height of the COVID-19 lockdown.

Edited by TSB