Lion Air Group has sacked 2,600 contract employees in its subsidiary airlines Lion Air, Batik Air and Wings Air as a result of declining flight traffic.
According to the spokesperson of the Group, Danang Mandala Prihantoro, the management decided against extending the work contract of the 2,600 employees, which accounts for almost 9 percent of the total workforce of the company.
He said: “Our [permanent] employees are not being terminated. We downsized our workforce by terminating our contract workers.”
In the same vein, Lion Air Group said in an official statement it was currently operating at 10 to 15 percent daily flight capacity of between 1,400 and 1,600 which had crippled the company’s finances.
The statement reads: “The COVID-19 pandemic has put the airline industry in a state of coma. Meanwhile, the company still needs to pay large expenses, which creates a great challenge for us.”
Apart from termination of contracts, the company reduced the wages of employees and management board since March until further notice.
The statement added: “We need to make the difficult decisions to ensure our business survives through operational downsizing, cost reduction and organizational restructuring amid the current airline industry situation that hasn’t return to normalcy.”
