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Jakarta Post

Lion Air Group cuts salaries, bonuses but says no layoffs in sight

  • Norman Harsono

    The Jakarta Post

Jakarta   /   Thu, May 21, 2020   /   08:37 am
Lion Air Group cuts salaries, bonuses but says no layoffs in sight A Lion Air plane parks at Soekarno-Hatta International Airport in Tangerang, Banten, in this undated photo. Lion Air Group has cut salaries and delayed Idul Fitri bonus (THR) payments to employees while giving an assurance that no job terminations are in the pipeline as the airline grapples with the impact of the COVID-19 pandemic. (JP/Ricky Yudhistira)

Lion Air Group has cut salaries and delayed Idul Fitri bonus (THR) payments to employees while giving an assurance that no job terminations are in the pipeline as the airline grapples with the impact of the COVID-19 pandemic.

The group said on Wednesday that the salaries of its 29,000 employees had been cut since March and would remain so for “an indeterminate period” to minimize costs.

The group includes Lion Air, Wings Air and Batik Air, all of which resumed limited flights on May 10 after a two-week long ban on flights to contain the coronavirus spread.

“This situation has forced the company's management to take steps to continue the airlines’ existence,” said Lion Air Group spokesman Danang Mandala Prihantoro in a statement, adding that group operations were only at 5 percent of the usual 1,000 flights a day.

The company is also set to delay THR payments due in May for middle and high-income employees. The former category includes mechanics and cabin crew and the latter includes cockpit crew and management.

Employees on minimum wages, such as cleaners, security guards, drivers and porters, will receive a reduced bonus for Idul Fitri with the remaining sum to be paid after the company’s financial situation recovers.

Danang added that Lion Air Group had “not begun thinking about or conducting assessments” into terminating any of its 29,000 employees.

Lion Air Group previously offered employees, including pilots, unpaid leave for May and June in a bid to reduce expenses.

The pandemic has hit the aviation industry hard as people stay at home, forcing a slump in demand for air travel.