COVID-19: Nigerian airlines struggle to pay March salaries, job cut imminent

 

  • Workers’ get pay reduction, April pay uncertain
  • Air Canada retrenches 15, 000, Lufthansa grounds operations till Sept

April 2020 will define the precarious situation of many airlines have found themselves as Coronavirus pandemic is expected to reach roof top.

In Nigeria, many airline workers have been asked to go on compulsory holiday for two weeks without pay, while others are proposing pay cut to their workers for as long as they keep their aircraft on ground.

Virtually all airlines around the globe have long stopped operations nearly two weeks ago over 70 per cent cut in capacity. They eventually shut down operations following closure of boarders and airspace restrictions by governments around the globe.

Nigerian carriers ate the humble pie just last week when all of them unanimously called for grounding of their operations and resorted to doing ‘humanitarian’ services which are far and in-between.

Woleshadarenews learnt that many of the carriers paid percentage cuts to their workers ranging from 50 to 70 per cent of their salaries.

It is however feared that many of them are not expected to paid salaries and allowances this because the airlines which were already struggling before now cannot just pay their workers.

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One of the workers who is a cabin crew with a leading domestic airline who spoke to our correspondent said, “We were lucky to be paid by our employers. We got 70 per cent of our salaries. Some airlines paid as low as 50 per cent of workers’ salaries”.

“The new month will most likely prove tough because it does not appear that the problem will end so soon. Airlines are grounded. Aviation is totally grounded. We need government intervention”.

It is very uncertain how airlines are going to react to the situation going by the fact that they will need to take their aircraft for periodic maintenance whether they fly or not. Some maintenance are for six months while others are longer depending on the type of maintenance the airplanes are scheduled to undergo.

Aircraft maintenance is divided into two sections called “Scheduled Maintenance” and “Unscheduled Maintenance”. Standard scheduled maintenance is further divided into three types of checks called ‘A Checks’, ‘C Checks’ and ‘D Checks’. (The B Check got absorbed into the others for more modern aircraft.)

The C and D are heavier checks. An average C-check costs $1 million (N400). Presently, Nigerian airlines collectively operated a fleet of about 65 airplanes.

 

The carriers are expected to pay for maintenance when the situation subsides. This according to an aircraft maintenance engineers will put huge strain on the operators because they would need to source funds elsewhere to repair their aircraft at a time they did not generate income or revenue.

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The engineer who spoke under condition of anonymity disclosed that many carriers would be left with no option than to cut their workforce to cover their overhead and cost of operations.

Nigerian carriers are not the only ones faced with the pain of cutting workforce. Air Canada will temporarily lay off more than 15,000 unionized workers beginning this week as the airline struggles with fallout from the coronavirus pandemic.

The airline said layoffs will continue through April and May amid drastically reduced flight capacity from the Montreal-based airline.

Canada’s largest airline says the two-month furloughs will affect about one-third of management and administrative and support staff, including head office employees, in addition to the front-line workers.

The carrier is also cutting between 85 per cent and 90 per cent of its flights, cancelling most of its international and U.S. routes in response to the global shutdown. Earlier this month Air Canada’s flight attendant union said 5,149 cabin crew would be temporarily laid off.

Lufthansa in a letter sent to its employees and intercepted by Wole Shadare news stated that the pandemic has had massive impact on the carrier with over 95 per cent of its commercial aircraft now grounded and only mainly cargo aircraft to maintain the supply chains for goods and services now flying.

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The airline disclosed that from April, 2020, “100 per cent of Lufthansa’s commercial aircraft will be grounded until September. Major cost cutting has already started within Lufthansa to mitigate the significant revenues Earnings Before Interest and Taxes (EBIT) lost and safeguard its cash flow.

“It has already been accepted that it’s 2020 targets will not be achieved  and it is not possible to assess what the final damage the impact of the COVID-19 virus will be due to the uncertainty as to know how long the current restrictions need to go on for but for the moment, Lufthansa does not expect any major change until end of September”.

From October, they will slowly ramp up flights again to 25 per cent and at best at 75 per cent capacity by December

Wole Shadare