AirAsia founders will not take salary to prevent layoffs

Photo by Ernest Leung | AeroNewsX

AirAsia Group Chief Executive Tony Fernandes announced that he and Chairman Kamarudin will not be taking any salary. CE Tony Fernandes said, "Kamarudin and I will not be taking a salary during this period". In the statement, Tony Fernandes made clear that many of their staff depend on AirAsia for their livelihoods and the wellbeing of their families, thus both Chief Executive and Chairman of AirAsia decided not to take a salary to reduce the damage due to the grounding of flights and low passenger traffic. He also said in the statement that their staff has accepted a temporary pay reduction between 15-75% to share the impact the CODID-19 is having on AirAsia business but will retain all their staff. AirAsia Group, Asia's largest low-cost carrier, reported a loss in revenue and is possible "the biggest challenge" AirAsia has ever faced. 96% of AirAsia's fleet has been grounded and they still have significant ongoing financial commitments such as fuel suppliers and leasing agents. Tony Fernandes said, "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."

Photo by Ernest Leung | AeroNewsX

AirAsia has several different associate carriers across Asia. With travel bans worldwide and lockdown in Malaysia and the Philippines, AirAsia Group has grounded 96% of its fleet. AirAsia Malaysia will be suspending all international and domestic flights from 28 Mar 2020 to 28 April 2020. AirAsia Philippines will be suspending all international and domestic flights from 20 Mar 2020 to 30 April 2020 due to the lockdown. Thai AirAsia will be suspending international flights from 22 March 2020 to 25 April 2020; domestic flights continue at a reduced frequency. AirAsia India will be suspending all flights from 25 Mar 2020 for 21 days due to government suspension of all domestic flights. AirAsia X Malaysia will be suspending most international flights from 28 Mar 2020 to 21 May 2020. Finally, AirAsia X Thailand will be suspending all flights from 16 Mar 2020 for 3 months.

The COVID-19 Pandemic has been particularly devastating for the aviation industry, with flights posing a tremendous risk for spread. Will even the most profitable carriers be able to survive this financial catastrophe?