Garuda implements staff pay cuts to minimise financial impact

 

Indonesian national carrier Garuda Indonesia will be slashing employee salaries between 10 to 50% until June 2020 as part of its cost-cutting measures due to the COVID-19 impact on travel. According to The Jakarta Post, as the airline “struggles to stay afloat”, it has taken on such a move to maintain business sustainability.

Garuda president director Irfan Setiaputra also said in the article that the pay cuts are only a postponement, and that the airline will explore ways to return the differences as per the company’s financial status. The pay cuts will vary depending on the employee's position in the company. The article stated that boards of directors and commissioners will be subject to a 50% cut, while vice president, captain, first officer and flight service manager will get a 30% pay cut. Meanwhile, flight attendants, experts and managers will receive a 20% reduction, and staff members such as analysts and officers will have salaries cut by 10%. 

However, Garuda Indonesia will continue to provide Idul Fitri THR (bonus) to its employees as per government regulations. According to the national carrier, it has recently cut 30% of its flights and said earlier that it will not lay off its employees. Marketing Interactive has reached out to Garuda for additional information. 

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This comes following Garuda Indonesia's move to slash its flight fares by 50% to 10 tourist destinations, as part of the government’s move to maintain tourism numbers despite the COVID-19 situation. These 10 locations include Batam Island, Bali, Yogyakarta, Labuan Bajo in East Nusa Tenggara, Lombok in West Nusa Tenggara, Malang in East Jaba, Manado in North Sulawesi, Toba in north Sumatra, Tanjung Pandan in Bangka Belitung and Tanjung Pinang in Riau Islands.

Along with its budget airline Citilink, Garuda also had set aside 65,000 seats at discounted rates, according to The Jakarta Globe. The news article reported that the Indonesian government has assigned IDR443 billion from the state budget to dock ticket fares on domestic flights by 30%. In addition, the government has also requested state-run oil company Pertamina and airport operators Angkasa Pura and Airnav to decrease fuel and ground handling costs, which ultimately make up the flight fares. 

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