KUALA LUMPUR: Malindo Airways Sdn Bhd (Malindo Air) is surviving with only 10 per cent of its pre-pandemic monthly revenue as the current challenging environment brought by Covid-19 has severely affected its operations.
The airline said it was still unable to fly abroad due to the border closures and there was hardly any demand for domestic air travel.
"This has had a crippling effect on our revenue front," according to an internal memo from Malindo Air chief executive officer's office dated October 28 seen by the New Straits Times.
The hybrid-full service carrier (FSC) owned by Indonesia's Lion Air Group said it had taken many drastic steps to curtail both its fixed and operating costs.
"Our fleet size today is 50 per cent of what it was earlier and even with the current reduced fleet, most of the aircraft are on long-term parking," the memo stated.
Previously, Malindo Air operated a fleet of 27 aircraft comprising the B737-800, B737-900ER and ATR72-600.
It was learnt that Malindo Air had reduced its fleet size to five B737 aircraft and six ATRs turboprop as part of its cost-cutting measures.
"We have been forced to take several measures as to date to mitigate the effects of the pandemic on our business. These include suspending all recruitments and reassessment of wages, ceasing allowances, and executing the Voluntary Long Term Unpaid (LTU) and Voluntary Separation Scheme (VSS)."
Regrettably, the memo read that the airline's efforts were insufficient to avoid and overcome the severity and prolonged impact of the Covid-19 pandemic on its business.
"Nonetheless, given the continuing nature of this crisis, we find that we must streamline our workforce to ensure sustainability of the company.
"Having exhausted all the initiatives above, we are left with no option but to carry out a retrenchment exercise."
Malindo Air was said to have trimmed its workforce from 3,200 to 1,000 staff and all the affected employees were expected to complete their employement by November 30.
"Within the next few days, Human Resources will notify the affected employees on the termination compensation benefits including company asset handover process.
"Rest assured that the company has taken into account the due process in compliance with the law and regulations. The relevant authorities also have been duly informed of this exercise," it added.