Arik airline cuts staff pay, to place 90% on indefinite leave without pay

Nigerian airline, Arik Air, on Thursday, said at least 90 per cent of its workers will proceed on indefinite leave without pay from May 1. 2020.

The airline’s Chief Executive Officer, Roy Ilegbodu, in an internal memo said the company took the decision as the outbreak of coronavirus pandemic has caused the airline an unimaginable financial strait.

“Of huge significance to us is that we have suffered a sharp decline of over 98% in our revenue streams since the suspension of our scheduled flights almost four weeks ago,” Ilegbodu said in a message sent to the staff of the company.

“Added to this is the rapid decline in the value of the Naira by over 35% against the benchmark and with oil prices now falling well below $15 per barrel, it is evident that we must, without further delay, take decisive action to preserve our organization.”

Ilegbodu said in order to “safeguard the survival of our organization” during this time and beyond, the management after “careful deliberation and analyses” the company’s staff will get “80% pay cut: for April and “90% of our staff” will proceed on leave without pay until further notice.

The coronavirus which started in Wuhan, China late December has forced many companies to cut down operations and even shut down temporarily while many might eventually shut down completely.

As the pandemic has brought much of the world economy to a halt, it has also collapsed of oil prices and countries, like Nigeria, which largely depends on oil may be in for a turbulent ahead.

Lagos Airport Hotels also on Friday asked its workers to proceed on three-month unpaid leave in order to cut down costs.

Earlier in the week, the French Government said more than 10 million employees in France — one out of every two in the private sector — have been laid off during the coronavirus lockdown.

Media reports in the US said more than 22 million persons have filed for unemployment benefits in the US.