With aviation sector grounded, sources say AirAsia looking to cut headcount

AirAsia currently has about 25,000 personnel worldwide, with about 10,000 in Malaysia. — Picture by Miera Zulyana
AirAsia currently has about 25,000 personnel worldwide, with about 10,000 in Malaysia. — Picture by Miera Zulyana

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KUALA LUMPUR, June 4 — AirAsia Group Bhd is planning to reduce its staff size as the low-cost carrier has been devastated along with the global aviation sector by the Covid-19 pandemic and government measures to contain it, according to internal sources.

Several sources in the airline confirmed the plan when contacted and told Malay Mail that several different department heads have notified their respective staff of this.

The exercise will both affect the flight crew and ground personnel under the AirAsia Group.

Departmental townhall meetings started today for at least three departments, they said.

“We don’t know how many will be affected but I think many of us will be affected across the board,” said one source.

AirAsia currently has about 25,000 personnel worldwide, with about 10,000 in Malaysia.

In one of the messages from the department head sighted by Malay Mail, AirAsia said the decision to fundamentally change the workforce size was taken as it would take several years for passenger loads to recover to levels before the pandemic hit.

Covid-19 has forced many governments worldwide including here in Malaysia to close their countries’ borders in an attempt to contain the pandemic, effectively crippling the air travel and tourism sectors.

Earlier today, The Star reported the group as engaging in talks to sell a 10 per cent stake to South Korea’s third largest conglomerate SK Corp.

The stake sale will take place through a private placement of new AirAsia shares at RM1 a share, The Star Online reported quoting sources.

Should the deal materialise, AirAsia will raise an estimated RM334.2 million from the placement of new shares.

On April 2, co-founder Tan Sri Tony Fernandes revealed that AirAsia was negotiating for loans instead of an outright bailout from the federal government.

While saying his airline has sufficient reserves to sustain it at least until the end of the year, Fernandes added that a government loan would help the company’s cash flow situation during the current Covid-19 pandemic.

As of the end of 2019, AirAsia reportedly had RM2.2 billion in reserves, with Fernandes suggesting the airline’s regional subsidiaries would also seek loans from the countries where they are based.

On April 17, Datuk Seri Mohamed Azmin Ali, Malaysia's minister of international trade and industry said a possible merger between MAS and AirAsia, a private airline based in Malaysia and operating in multiple countries, was considered even last year.

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