AS countries close their borders to visitors, especially those from nations with Covid-19 cases, airlines are taking a big hit, and in Malaysia, Malindo Air is citing cash-flow woes.

Some airlines have announced cost-cutting measures, such as a reduction in salaries for management and cabin crew, while others have revised downwards their growth and passenger targets.

Malindo seems to be the first airline in Malaysia to roll out “cost-cutting initiatives” in response to the outbreak.

In an internal memo bearing the name of the carrier’s CEO, Mushafiz Mustafa Bakri, seen by Bernama, the company said it has had to scrap numerous routes due to the operational challenges brought about by the coronavirus.

Coupled with an earlier “cost-cutting initiative to stay afloat”, said the memo dated February 7, “this has put a huge constraint on our cash flow”.

Given this position, Malindo has to stagger the payment of wages this month, it said.

The memo said staff with a gross salary of up to RM5,000 will be paid in full today, but those making more will only get their basic salary, with the balance to be paid on March 7.

Efforts to contact Malindo for comment proved unsuccessful.

On Wednesday, Thai Airways announced salary cuts for management, with senior members agreeing to reduce their pay by up to 25% for six months, starting next month.

The measure is being taken to alleviate losses from the impact of slowed passenger travel due to the outbreak, said reports.

Hong Kong’s national carrier, Cathay Pacific Airways, has reduced flights over virus fears, and predicted a decrease in profit for the year.

It has also asked employees to go on unpaid leave to bring down operational expenses.

Malaysia’s AirAsia, meanwhile, has cancelled some flights to China, South Korea and Taiwan, offering full refunds.

Research firm CGS-CIMB Research said the airline could post a core net loss of RM1.1 billion owing to lower demand and yields in Malaysia, Thailand and the Philippines.

Malaysia Airlines is allowing cancellations with full refunds, as well as free ticket alterations for flights to and from China.

The International Air Transport Association previously said its initial assessment of the impact of Covid-19 showed a potential 13% full-year loss in terms of passenger demand for carriers in the Asia-Pacific region. – Bernama, February 28, 2020.