AirAsia, AirAsia X suspend flights, ground most planes; pay cut for top executives

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KUALA LUMPUR (March 26): Low-cost carrier AirAsia Group Bhd and its long-haul arm AirAsia X Bhd (AAX) will ground most of its fleet and suspend flights from March 28 except a small number mostly within Indonesia and Thailand.

The carriers are the latest to join airlines around the globe to do so as travel demand drops because of the coronavirus (Covid-19) outbreak and cross-border travel retrictions.

To further manage and contain costs, AirAsia said its management and senior employees will forego their salary, ranging from 100% at the very top to 15%.

"This will help ensure that we can ride out this prolonged period of extremely low travel demand and at the same time minimise the impact on our employees, especially those in junior positions," it said in a statement today.

AirAsia will temporarily suspend all international and domestic flights in Malaysia from March 28 to April 21, while that of its flights operated by AirAsia Philippines will be suspended from March 20 to April 14.

AirAsia Thailand will halt its international flights from March 22 to April 25, while AirAsia Indonesia will significantly reduced its international operations. Both airlines will continue to operate domestic flights but at reduced frequency.

Meanwhile, AirAsia India has suspended its flights from March 25 until India's travel ban is lifted.

AAX will also ground most of its planes in Malaysia from March 28 to May 31, while AirAsia X Thailand has suspended its operations for three months since March 16.

"We will continue to evaluate the situation closely and we are prepared to reinstate our services as soon as the situation improves, subject to the necessary regulatory approvals," said AirAsia.

"We believe this temporary fleet hibernation is the right thing to do to ensure the well-being of our guests and employees, which will remain as the top priority of our business during this challenging time," it added.

The group said affected passengers will be notified by email and SMS. "They have the option of converting their flight booking into a credit account that is valid for future redemption for 365 days or moving their flights for an unlimited number of times without any charges to another date prior to Oct 31."

It was previously reported that the CEOs of AirAsia, Malindo Airways Sdn Bhd, Malaysia Airlines Bhd and FlyFirefly Sdn Bhd had met with Finance Minister Tengku Datuk Seri Zafrul Tengku Aziz to discuss financial aid and other reliefs as airlines struggle struggles to find funds to operate.

AirAsia shares closed down one sen or 1.35% at 73 sen today, with 48.26 million shares done, bringing a market capitalisation of RM2.44 billion. Share price of AAX settled 0.5 sen or 8.33% lower at 5.5 sen, with 10.71 million shares traded, for a market cap of RM228.15 million.

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