KUALA LUMPUR: Malaysia Aviation Group (MAG) has initiated new “humane” measures to reduce its overall operational cost with a significant pay cut among its top management from this month.
Group chief executive officer Captain Izham Ismail said the initiatives would last until the situation gets better to sustain MAG’s cash flow.
MAG’s air transportation services subsidiaries include Malaysia Airlines Bhd, Firefly and MASwings and MAB Kargo.
“The C-suites and I shall lead the way in taking a 35 per cent reduction in our total gross income. Assistant managers to general managers (and its equivalent) will also be taking 10 per cent to 25 per cent reduction in their total gross income, depending on job grades,” he said in a circular to MAG’s employees recently.
Izham said its board members had avolunteered to take a 50 per cent cut from their monthly director fees.
“I would do everything humanly possible before going to the next phase impacting your salaries and job security. But unfortunately, the measures taken have not been able to sustain our cash position to the desired level.
“Our efforts in reaching out to OEMs and vendors for contract negotiation have not yielded significant results and the unprecedented closure of borders by governments worldwide further compounded the magnitude of our cash burn,” he added.
Izham said MAG would need to take more hard measures as the group aggressively defend its cash position in anticipation of further slump in travel which likely last for at least another three to six months.
“During times like these, those at leadership or management level will need to take the lead in protecting the rest of the organisation. This is going to be painful for now, but it is what it takes to save jobs from being lost at this stage,” he said.
Izham said the move to trim costs further was vital to protect its staff, especially in the lower income bracket, and to avoid job cuts.
“It was not an easy decision for me to make, but in order for all of us to continue maintaining our livelihood and ensure the sustainability of the company, sacrifices will have to be made,” he said.
Izham added that things were fluid as the company needed preparations to embrace the uncertain future.
MAB incurred a total of RM2.04 billion in revenue loss from booking cancellations since late January with network sales plummeted 52 per cent year-on-year while forward bookings were on a downtrend.
Izham said it had been almost 12 weeks since Malaysia Airlines was wrought by the deadly pathogen.
This forced the national carrier to reduce its capacity from 50 per cent on March 18 to 80 per cent a week later and 94 per cent currently.
“This is truly a scenario that is beyond any risk calculation that any airline would ever envision to happen,” he said.
Despite the financial constraint, MAG continues to carry out its national duties by bring people home to their loved ones, while facilitating essential movement to ensure global supply chains are maintained.
“We even do rescue flights to bring Malaysians home and other nationals who need to return to their countries.
“Our cargo operations is also flying full swing to ensure medical supplies such as personal protective equipment, masks, sanitisers and entilators are delivered,” he said.
Meanwhile, Malaysia Airlines said it would resume flights from the Peninsular Malaysia to Sabah and Sarawak, beginning April 15.
The flights include between Kuala Lumpur to Kuching, Miri, and Kota Kinabalu.
Additionally, the flights from Kuala Lumpur to Sarawak can be connected to other cities in Sarawak through MASWings flights.
The airline said flight frequency would be added depending on the increasing number of passengers load.
