Malindo to downsize to about 30% due to Covid-19, say sources

by Emmanuel Samarathisa

MALINDO Airways Sdn Bhd is expected to downsize and emerge a much leaner unit due to the Covid-19 crisis.

The Malaysia-based low-cost carrier is expected to keep up to 30% of its workforce while the remainder 70% is expected to go on unpaid leave, sources tell FocusM on condition of anonymity.

Further, Malindo has discontinued the services of its contract staff and is looking to return 20 aircraft to parent company Indonesia-based Lion Air Group, one source said.

The airline is also seeking government assistance to cover overheads for roughly six months, they said.

On March 7, Malindo requested that staff take a 50% cut in their basic salary, which translated to a reduced number of working days of up to 15 days a month.

The carrier is not alone in its struggle to stay afloat. Its listed competitor, AirAsia Group Bhd (AAB), is also seeking a loan from the government.

AAB founder Tan Sri Tony Fernandes told Bloomberg TV yesterday that while the group had sufficient cash, he is still looking forward to a loan to ease cash flow problems.

“We don’t need a bailout. Obviously, many airlines are looking at loans. We think the cash can last us for the most part of this year and if sales return, then we’re okay. But it’d be great to get a loan as well and we’re working on that with the government,” he said.

Minister in the Prime Minister’s Department (Economic Affairs) Datuk Seri Mustapa Mohamed had hinted that some kind of rescue package will be doled out to all Malaysia-based airlines including AAB, MAB, Malindo and Firefly.

Meanwhile, the New Straits Times reported on April 1 that these cash-strapped entities could get up to RM10 bil in aid from sovereign wealth fund Khazanah Nasional Bhd. – April 3, 2020

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