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Covid-19: Malindo Air asks staff to take up to 50% pay cut to cushion coronavirus blow

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KUALA LUMPUR (Reuters) - Malindo Air has ordered its staff to take up to a 50% pay cut and two weeks unpaid leave as the coroanvirus epidemic hurts air travel demand and the broader industry, according to a memo sighted by Reuters.

In a company-wide memo sent on Friday, chief executive officer Mushafiz Mustafa Bakri said the airlines have implemented several measures to cope with the revenue shortfall, including suspending flights, appealing to suppliers to defer payments, and asking staff to volunteer for unpaid leave.

“With a heavy heart, with not much of any further concrete options, we are now left with no choice but to ask each one of you to take a pay cut of your basic pay of up to 50% for the next several months until normalcy returns,” Mushafiz said in the memo.

As part of the pay cut, employees were asked to reduce their number of working days by up to 15 days a month.

Malindo Air, the Malaysian arm of Indonesia’s Lion Air, did not immediately respond to requests for comment.

More: https://www.reuters.com/article/us-health-coronavirus-malaysia-airlines/malaysias-malindo-air-asks-staff-to-take-up-to-50-pay-cut-to-cushion-coronavirus-blow-idUSKBN20U079

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When a corporation have issues paying staff salaries, its days are numbered. Hopefully Malindo survive this wave through this measures. 

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Malindo Air will begin transferring 15 Boeing 737s to its Lion Air Group sister carrier Batik Air this month.

Malaysia-based Malindo will lose half of its jet-powered fleet when it transfers the 15 737s to Indonesia-based Batik. Cirium fleets data shows that Malindo has 24 737-800s and six -900ERs in service. It also has 12 ATR 72-600s in service, with one now in storage.

 

https://www.flightglobal.com/fleets/malindo-air-transferring-15-boeing-737s-to-batik-air/137183.article

 

Looks like a sign of Malindo leaving Msia due to overcapacity. 

Edited by jahur

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Well their strategy was to disrupt and weaken Airasia so that they don't have resources to fight Lion Group in Indonesia. To some extent, this strategy has worked but it is still being played out. We just have to observe!

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Malindo Air ceases all flight operations, most employees on unpaid leave this month
 

KUALA LUMPUR: Malindo Airways Sdn Bhd (Malindo Air) is ceasing all flight operations effective this month, and has asked most of its employees to go on unpaid leave from April.

Malindo Air chief executive officer Captain Mushafiz Mustafa Bakri said the measures were taken due to continuing nature of the Movement Control Order (MCO) and restrictions across its international markets owing to the Covid-19 pandemic.

“I foresee the situation to be the same in early May. We may perhaps review the situation later in the month and in all possibility only operate a very limited number of flights,” he said in an internal memo to employees sighted by the New Straits Times (NST) today.

https://www.nst.com.my/business/2020/04/582265/malindo-air-ceases-all-flight-operations-most-employees-unpaid-leave-month

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Malindo reported to undertake layoffs

KUALA LUMPUR, Oct 12 — The Covid-19 pandemic’s adverse effects on the aviation industry has seen many airlines having to undertake massive cost-cutting measures, including lay-offs.

According to a report by a news portal, Malindo Airways Sdn Bhd has not been spared from such a predicament, and the hybrid-full service carrier is expected to cut about 2,200 jobs—more than half of its 3,200-strong workforce.

The airline is also expected to reduce its fleet size to five Boeing 737 jets and six ATR turboprops.

https://www.malaymail.com/news/money/2020/10/12/malindo-reported-to-undertake-layoffs/1912041

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Malindo Air downsizing shakes things up

https://www.thestar.com.my/business/business-news/2021/10/26/malindo-air-downsizing-shakes-things-up

KUALA LUMPUR: Malindo Air's downsizing of its Malaysian fleet will have a spillover effect on local aviation players, eight years after it first disrupted the local industry by setting up operations here.

"With Malindo likely operating a reduced fleet going forward, it stands to reason that the main loser will be Malaysia Airports Holdings Bhd (MAHB) via lower Malaysian passenger traffic and the main winner will be AirAsia Group Bhd via higher Malaysia AirAsia average fares," said Maybank Investment Bank Research in a note.

In efforts to scale down its Malaysian operations, Malindo, which is part of Indonesia's Lion Air Group, has reduced its fleet from a high of 42 aircraft to 18 aircraft today.

Since 1Q20, Malindo has transferred 17 aircraft to its sister Indonesian carrriers, returned five aircraft to lessors and stored one aircraft.

According to Maybank IB, Malaysian carriers now operate 233 aircraft or 10% less than the high of 260 aircraft in 2019.

Starting next year, Malindo will take delivery of 10 B737 MAXs but Malaysia Airlines will dispose of six A380s, which would mean the number of aircraft carriers in 2020 will remain lower relative to 2019.

The impact of Malindo's smaller fleet will be in contrast to what happened in 1Q13 when the carrier commenced operations in Malaysia.

At the time, the other Malaysian carriers reacted by acquiring or leasing more aircraft, increasing capacity and cutting fares.

 

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Malindo was set up mainly to disrupt Airasia Group. A strong Airasia Group would be a real threat to Lion Air in their home market. To a great extent, this has been achieved as Indonesia Airasia hardly grew. So it is not much of an issue for them to cut the size of Malindo Air to reflect current market realities. Airasia Group is not in the position to exploit it because the Malaysian market is very price sensitive. After the initial rush for holidays after the long lockdown, I foresee the market returning to more usual levels. It is good that all three airlines in Malaysia are cutting their aircraft and capacity. Hopefully we will see the end of irrational competition. A more orderly market will be good for all parties.

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Malindo Fleet Update:

  • ATR 72-600 - 12
  • B737-8GP - 2
  • B737-9GP/ER - 1

At its peak, Malindo used to have:

  • ATR 72-600 - 20
  • B737-8GP - 22 (-1 9M-LNB)
  • B737-9GP/ER - 6

Seven ATR 72 were transferred to Indonesia's Wings Air between 2017-2018. One (9M-LGD, used to be leased to Royal Brunei Airlines) left in 2020 to Wings Air too.

Majority of the B737-8GP (17 airframes) were transferred back to Indonesia under Batik Air Indonesia (16 left in 2020, one in 2021). Three (LNS, LNT, LND) returned to its respective lessors, leaving final two (9M-LNP, 9M-LNV).

All six B737-9GP/ER are returned to lessor, to be leased to Delta Airlines. Five left, leaving one (9M-LNG).

Edited by JuliusWong

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