As the airline industry across the world continues to take a beating following the suspension of most local and international flights, Nigeria’s largest commercial airline, Arik Air, on Thursday informed staff it would cut the salaries of its employees by a whopping 80 per cent.
In an internal memo obtained by PREMIUM TIMES the airline’s Chief Executive Officer, Roy Ilegbodu, informed employees that the management of the company has also decided that at least 90 per cent of its workers will proceed on indefinite leave without pay from May 1. 2020.
When reached for comment, spokesperson of airline, Ola Banji, succinctly confirmed the decision but declined to give further details.
In the memo seen by PREMIUM TIMES, Mr Ilegbodu lamented that the outbreak of the pandemic has placed the company in an unimaginable financial strait that is unlikely to ease anytime soon.
He said the company revenue stream has 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 the price of oil.
“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.
He said though these measures have led to a reduction of expenditure, “the outlook for the near future is not encouraging and our current level of business simply cannot support our operations for much longer.”
“For this reason, to safeguard the survival of our organization, we are constrained to introduce additional measures to curtail our costs, as dictated by the turn of events.
“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.”
He, however, explained the decision will be reviewed monthly and the company’s human resources department will keep workers informed about future decisions reached.
On Friday morning, employees of the airline subsequently received two memos from the company’s HR department.
The first memo explained that during the compulsory leave, the company’s health insurance scheme (HMO) shall continue to run.
The second memo explained that while all staff have been placed on compulsory leave without pay, staff involved in the company’s charter operation were excluded from the restructuring.