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Jakarta Post

Indonesian airlines carry out layoffs to cope with COVID-19 pressures

  • Riza Roidila Mufti
    Riza Roidila Mufti

    The Jakarta Post

Jakarta   /   Fri, March 27, 2020   /   09:53 am
Indonesian airlines carry out layoffs to cope with COVID-19 pressures Several airplanes are parked on the apron of Soekarno-Hatta International Airport in Tangerang, Banten, on June 6, 2016. (Antara/Fanny Octavianus)

A number of Indonesian airlines have started taking efficiency measures amid challenging times caused by the COVID-19 pandemic by laying off employees, ranging from pilots, flight attendants, technicians to other supporting crew, as reported by the Indonesia National Air Carrier Association (INACA).

The pandemic has hit the airline industry hard, with many airlines forced to cut both international and domestic flights due to travel bans and restrictions to several countries. Virus fears have also held people back from traveling by air.

INACA chairman Denon Prawiratmadja said on Thursday that there had been a drastic decline in the number of air passengers since early March, causing all airlines to cut flight frequency and routes by 50 percent or more.

“If there is more uncertainty about when COVID-19 can be contained, this will worsen the aviation industry [situation] and may even lead to operational termination due to bankruptcy,” Denon said in an official statement.

He added that airlines had been halting operations and laying off employees to reduce financial loss.

Denon went on to say that the industry needed help in the form of fiscal incentives, such as corporate income tax payment postponement and spare part import duty suspension, as well as stimulus from the government through discounts on several fees to keep the industry alive during the pandemic and recovery period.

Moreover, the industry hopes state-owned enterprises (SOEs) provide assistance, including with a reduction in airport and navigation fees.  If the government and SOEs did not immediately respond to such demands, Denon said there would be more massive layoffs to ensure the airlines’ survival.

“Such crisis has also hit supporting industries, such as aircraft maintenance, ground handling and travel agents. Therefore, INACA is really hoping for a positive response from the government to avoid more job cuts,” the chairman said.

A drastic drop in flight frequency and vast flight cancellations have been reported since January. Angkasa Pura I (AP I), for example, saw massive flight cancellations between January and February at its 15 airports across the country due to decreasing demand.

During the period, AP I reported that as many as 12,703 flights with about 1.67 million passengers had been canceled – 11,680 of which were domestic.