After Laying Off 2,600 Employees, Lion Air Cuts Employee Salaries

Lion Air aircraft. (Irfan Meidianto / VOI)

JAKARTA - The COVID-19 pandemic has "succeeded" in hitting all business sectors, one of which is the air transportation sector. One of the companies affected was Lion Air Group.

The company, which operates Lion Air, Wings Air, and Batik Air, gave an explanation regarding the company's management of employees during the COVID-19 pandemic alert period.

Corporate Communications Strategic of Lion Air Group, Danang Mandala Prihantoro said, Lion Air Group announced a reduction in Indonesian and foreign workers. The reduction method is based on the period the work contract ends and is not extended.

"Lion Air Group is currently in difficult and challenging times, due to the condition that was formed as a result of COVID-19 and had a tremendous impact resulting in a situation full of uncertainty," said Danang in a statement received by VOI, Tuesday, July 7.

Regarding layoffs (PHK), said Danang, the reduction in workforce based on the term of the work contract ended and was not extended, namely approximately 2,600 people. The total number of Lion Air Group employees reaches approximately 29,000 people.

The tough decision, according to Danang, was taken with the main objective as a strategy in line with maintaining business continuity and the company being maintained, streamlining company operations, and reducing expenses. In addition, it is also to restructure the organization in the midst of flight operational conditions that have not returned to normal as a result of the COVID-19 pandemic.

Danang added, in proactive actions based on mitigation in order to maintain the said continuity, in conditions of very minimal income, due to travel restrictions and temporary suspension of flight operations.

Since it started operating again in stages, Lion Air Group has operated on average 10-15 percent of its previous normal capacity, which is an average of 1,400-1,600 flights per day.

"This year, the COVID-19 pandemic has left the aviation industry suspended or not operating normally on domestic and international networks. Meanwhile, the costs that have to be borne without operating are still quite large, causing very heavy difficulties," explained Danang.

Lion Air Group then held talks with business partners and cut the income of all management and employees with varying values, where the greater the income the greater the nominal value of the discount.

"These policies have been implemented and implemented this year in March, April, May, June until an undetermined time," said Danang.

Return to Work Opportunity

Lion Air Group plans, if in the future the company's condition recovers and gets better in terms of business, operation and income, the said employees - who are not extended by their work contract - will be prioritized to have the opportunity to return to work at Lion Air Group.

"Lion Air Group continues to monitor, collect data and information, study the situation as it prepares strategies and other steps that will be taken to maintain the company's survival while minimizing the burden borne during the COVID-19 pandemic," concluded Danang.