Coronavirus: Arik airline places staff on indefinite leave without pay

The Nigeria’s largest commercial airline, Arik Air, has placed all its workers on indefinite leave without pay effective from May 1. 2020, following the suspension of most local and international flights, as a result of the ravaging coronavirus,

Penpushing reports that, the authorities communicated the decision to the workers in an internal memo issued by the Chief Executive Officer, Roy Ilegbodu, and also informed staff  that the company would also  cut the salaries of its employees by a whopping 80 per cent.

The management of the company in the memo explained that at least 90 percent of its workers will be affected in the indefinite leave without pay from May 1. 2020, lamenting that the outbreak of the pandemic has placed the company in an unimaginable financial strait that is unlikely to ease anytime soon.

.The Director said the company revenue stream has plunged by 98 per cent and the financial downturn has been made worse by the drop in the value of the naira and the dip in the price of oil.

“To date, the situation created by the COVID-19 pandemic remains dire with a high level of uncertainty, even within medical circles regarding the containment of the pandemic. Although daily updates from a few countries seem to be encouraging’,

‘Our situation in Nigeria appears to be getting worse. With the current observed trend of events, it is prudent to lean on the assumption that the situation is likely to persist for a while longer’, he stated.

“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. 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,” he wrote.

The Company boss said, as a result of these, the organisation has tried to save cost by renegotiating rates with its suppliers and contractors and has also “implemented contingency plans for staff and introduced operational support flexibility.”

Penpushing reports that, he said though these measures have led to a reduction of expenditure, “the outlook for the near future is not encouraging and our current level of business simply cannot support our operations for much longer.”

“For this reason, to safeguard the survival of our organization, we are constrained to introduce additional measures to curtail our costs, as dictated by the turn of events. After careful deliberation and analyses, management has decided to implement an 80% pay cut for all members of staff across the entire organization for the month of April 2020. Furthermore, commencing from May 1st 2020, no less than 90% of our staff will proceed on leave without pay until further notice.”

Penpushing further reports that, the Director disclosed that  the decision will be reviewed monthly and the company’s human resources department will keep workers informed about future decisions reached.