Malindo Air refutes allegations of pocketing Socso benefits

KUALA LUMPUR: Malindo Air has clarified that whatever sums it received from the Social Security Organisation (Socso) were fully disbursed to its employees, and the airline did not retain any portion of these sums as is otherwise being baselessly alleged by certain quarters.

"Under the Employment Retention Programme (ERP), Malindo Air received a total of RM1,267,200 for April 2020 which was credited in mid-May 2020 from Socso and disbursed to 2,112 staff.

"Thereafter, a total of RM1,486,800 was received in late June 2020 and credited to 2,478 staff accordingly," the airline said in a statement today.

It added that when Socso discontinued the ERP and replaced it with the Wage Subsidy Programme (PSU scheme), only 196 staff benefitted.

"A total of RM235,200 was received for the months of June and July 2020, which Socso only disbursed in late August and September 2020 respectively.

"Nonetheless, Malindo Air has ensured that the staff who benefitted from both the schemes were retained for more than three months as per their governing rules," it said.

Prior to the pandemic, Malindo Air said that its average monthly revenue was RM200 million.

"This in turn supported a payroll of 5,000 personnel amounting to RM40 million a month.

"The pandemic which resulted in the grounding of almost all of our fleet since March has had a crippling effect on our finances with current average revenue being just 7.5 per cent of the pre-pandemic levels," the airline's chief executive officer Captain Mushafiz Mustafa Bakri said.

"How do you continue to maintain status quo for eight months and still counting, when there is barely any revenue or meaningful support of any kind?," he asked.

Given the huge erosion in its cash flows due to the Covid-19 pandemic, the airline has had to undertake a massive cost-cutting exercise in order to remain afloat, it added.

Malindo Air downsized its fleet by 50 per cent by transferring out 20 aircraft.

This, it said, resulted in a monthly savings of about RM20 million.

The airline also said that it has sought deferments and renegotiated contracts with its vast number of service providers, including aircraft lessors and airports.

"On the people front, despite having taken numerous steps such as a Voluntary Separation Scheme (VSS) for 349 of our staff and a Long Term Unpaid (LTU) scheme for 439 of our pilots and cabin crew, with no immediate prospect of restarting our regular operations, we are now having to resort to retrenching 1,861 staff in order to remain in operations," it said.

Malindo Air also said it is working closely with the Human Resources Minister Datuk M. Saravanan; the Director General of Industrial Relations Malaysia, Khalid Jali and other related agencies to assist all its displaced staff retraining and re-skilling for onward job placements.

"Eight months on from the start of the pandemic and with no sight of any restrictions being lifted, borders being opened or the pandemic abating, air travel continues to remain in a state of flux globally," it added.

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