Commercial airliner, Arik Air, has informed its workforce of plans to cut salaries by 80 per cent.
The move follows shutdown of the airline industry across the world due to the coronavirus-induced lockdown.
The company, in an internal memo on Thursday by its chief executive, Roy Ilegbodu, also said it decided that at least 90 per cent of its workers would proceed on indefinite leave without pay from May 1, 2020.
Citing the outbreak of the pandemic, Mr Ilegbodu said the company’s revenue stream had plunged by 98 per cent and the financial downturn has been made worse by the drop in the value of the naira and the dip in global oil price.
“To date, the situation created by the COVID-19 pandemic remains dire with a high level of uncertainty, even within medical circles regarding the containment of the pandemic. Although daily updates from a few countries seem to be encouraging, our situation in Nigeria appears to be getting worse. With the current observed trend of events, it is prudent to lean on the assumption that the situation is likely to persist for a while longer.
“Of huge significance to us is that we have suffered a sharp decline of over 98% in our revenue streams since the suspension of our scheduled flights almost four weeks ago. Added to this is the rapid decline in the value of the Naira by over 35% against the benchmark and with oil prices now falling well below $15 per barrel, it is evident that we must, without further delay, take decisive action to preserve our organization,” he wrote.
The memo further read: “After careful deliberation and analyses, management has decided to implement an 80% pay cut for all members of staff across the entire organization for the month of April 2020. Furthermore, commencing from May 1st 2020, no less than 90% of our staff will proceed on leave without pay until further notice.”
The decision, Ilegbodu said in the memo, would be reviewed monthly.
A second memo from the company’s human resources department stated that its staff involved in charter operation were excluded from the restructuring.
Following its inability to repay debts in excess of N300 billion, the Asset Management Corporation of Nigeria (AMCON) took over Arik Air in February 2017.
The corporation has suggested to the Federal Government to convert the airline into a national carrier.
