The management of Arik Air has announced that it will implement an 80% pay cut for members of staff across board for the month of April 2020 and from May 1st 2020, 90% staff will proceed on leave without pay until further notice.
The airline made this known in a memo from its Managing Director, Captain Roy Ilegbodu who explained that the review is as a result of sharp decline of 98% of the airlineâ€™s revenue stream, decline in naira value as well as current oil prices but stated the position will be reviewed on a monthly basis and communications on further developments will be shared as the situation evolves.
According to him, â€œmanagementâ€™s focus has always been hinged on the well-being and safety of our staff, managing the airlineâ€™s liquidity as an organization and creating the opportunity to ride out of inclement circumstances such as the one we are faced with today.â€
He said to safeguard the survival of the organisation, it introduced additional measures to curtail costs, as dictated by the turn of events.
This is in addition to the fact that the airline said it had reached out to its suppliers, specifically negotiating reduced rates on all our contracted services and mitigating operational expenses due to changes in demand and had also implemented contingency plans for staff and introduced operational support flexibility.
The memo read: â€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.
â€œOf 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.
â€œAfter 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. This position will be reviewed on a monthly basis and communications on further developments will be shared by our HR department as the situation evolves.
â€œWhile we are not unaware of the challenges that each and every one of us may face during this difficult period, we join you in remaining hopeful that this ugly situation will abate in the shortest possible time and our organization will come out stronger in the long run. We are confident that the steps we are taking now are in the best interest of all and will see us through this difficult epoch in the history of mankind.â€