KUALA LUMPUR: Pumping in public funds to save airline companies hard hit by the Covid-19 pandemic should not be seen as a bailout.
The massive 'overnight' losses incurred by their owners was not due to mismanagement but rather, the abrupt halt in world travel, said the National Union of the Flying Attendants of Malaysia (Nufam).
Nufam president Ismail Nasaruddin said the term bailout should only apply in cases when public funds are used to save companies from going under as a result of their mismanagement and financial misconduct.
"As such, any injection of funds by the government to reboot the (aviation) industry must be considered as a stimulus package because the airlines' industry is a vital cog in the national economy. It is one that provides the boost to many associated sectors," Ismail said at the 2nd Malaysian Trades Union Congress webinar organised by the congress on Covid-19 and "Protection of Workers – What is wrong?"
Ismail said the airlines sector in Malaysia requires urgent help from the government as more than 100,000 employees, including pilots, flight attendants and ground staff had been hit with either a salary freeze or forced to take massive salary cuts.
He said that the actual number of those in dire straits in the industry was three or four times more if the workers' dependants were taken into account.
Thus far, the government has failed to understand that most of the airline workers In Malaysia earn a low basic salary and depend on various allowances to sustain themselves and their dependents, he said.
However, many of these workers had their allowances frozen or reduced, and were forced take pay cuts when Malaysia and most other countries grounded flights to contain the spread of the virus.
Ismail said local airline employees also suffered another setback when their Bantuan Prihatin cash aid applications were rejected as the Inland Revenue Department deemed them as 'overqualified' for the aid, based on their 2019 income when the industry was 'normal'.
He explained that many cabin crew members earned very low basic salaries which could be as little as RM1,200 and even this amount was reduced by half when the pandemic struck and air travel was halted.
"So, you can imagine the kind of hardship my colleagues and their dependants went through in the last three months. They have all appealed (for Prihatin aid) and I hope the government will understand what the actual problem here is," he said.
Ismail said the government must also not overlook the contributions of the airlines, tourism and related economic sectors, which he said was the third-highest contributor towards the national GDP.
"We are key players and a financial injection is sorely needed. There must also be a special focus on these industries as we want to be prepared if and when the second wave of Covid-19 hits. The buffer is also needed to cushion the next 12 months or so while the economy slowly picks up," he added.
In a related matter, Ismail called for all top airlines management to take pay cuts and reduce their perks voluntarily.
"These must include forgoing huge bonuses, travel and financial perks for the Board of Directors. We have written to the government with this suggestion.
"The savings from this will not affect the comfort and luxurious lifestyles of these top officials as they already earn very high salaries but it will save thousands of jobs of the low-income category," he said.
Ismail said the overheads in the operations of airlines were indeed high with the fuel costs amounting to 30 per cent of a company's revenue, adding that stopping their services overnight meant a 100 per cent shutdown as the airlines were deemed as an essential service during a pandemic.
Southeast Asia's biggest low-cost carrier AirAsia Group was reportedly set to reduce its workforce by up to 30 per cent, with the retrenchment including cutting 60 per cent of AirAsia's cabin crew and pilots for both AirAsia and its medium-haul affiliate AirAsia X.
The group is also looking at slashing remaining staff salaries by up to 75 per cent as well as mulling a 10 per cent sale in the airline stake to raise cash after air travel came to a virtual standstill due to the pandemic.
Malindo Airways Sdn Bhd (Malindo Air) has also offered a voluntary separation scheme (VSS) to all permanent and contract staff after failing to secure loan or guarantees from the government to sustain operations.
The Malaysian hybrid-full service carrier (FSC) owned by Indonesia's Lion Air Group said the VSS applied to those with service contracts expiring beyond Dec 31, 2020, at all levels, functions and locations voluntarily.
Source : https://www.nst.com.my/…/nufam-saving-airlines-pandemic-not…
KUALA LUMPUR: Pumping in public