Indonesia’s Lion Air to furlough 8,000 employees

Indonesia’s Lion Air Group will furlough between 25% and 35% of its 23,000 employees because of continued disruption to travel in the region caused by Covid-19 restrictions, it revealed in a statement. The move will affect up to 8,050 people and their families.

The decision at the group, which operates Lion Air, Batik Air, Wings Air (Indonesia), Malaysia’s Malindo Air, and Thai Lion Air, was taken to “maintain the company’s business and sustainability, streamline company operations, cut costs, and restructure the organisation amid aviation operational conditions that have yet to return to normal from the impact of the Covid-19 pandemic,” the statement released on July 31 said.

However, it affects only the company’s operations and three airlines – Lion Air, Batik Air, and Wings Air – in Indonesia.

“For those who are laid off, Lion Air Group will try to help provide support for living expenses according to the company’s abilities,” the group’s communications chief, Danang Mandala Prihantoro, promised in the statement. “For those at home, online training will be held according to each unit.”

Since June, Indonesia has suffered one of the worst coronavirus outbreaks in Asia, with around 3.5 million infections and tough restrictions in Bali and Java since the start of July. Lion Air Group’s operations have been reduced to 10% to 15% of their normal capacity of 1,400 flights per day, the group said.

“Turnover is very minimal, there are still financial commitments that must be fulfilled, there are travel restrictions and a temporary reduction in operational frequencies on certain routes, and the costs that must be borne are still quite large,” the head of communications said. “Therefore, Lion Air Group is carrying out a review to focus on strengthening all business lines that have an overall impact.”