Low-cost carrier Lion Air in Indonesia announced it will furlough an additional 8,000 employees as the travel sector suffers from the recent COVID-19 outbreak.
Lion Air Group will furlough between 25 and 35 per cent of its employees as it reduces its capacity due to new travel restrictions, it said in a statement.
The carrier based in Jakarta will reduce its normal operations of 1,400 flights per day by 10 to 15 per cent.
The decision was taken to “maintain the business and company’s sustainability, streamline company operations, reduce costs and restructure the organisation amid aviation operational conditions that have yet to return to normal from the impact of the COVID-19 pandemic”, the statement said.
The company employs roughly 23,000 staff members across its entire operations, but now due to the Delta variant soaring, the carrier cannot maintain its schedule.
In Indonesia, there are almost 3.5 million cases of COVID-19, many spiked within the last month as the contagious Delta variant began spreading in early July.
Almost 96,000 people have died and during the month of July, between 35,000 to 60,000 cases were recorded per day.
In Indonesia, 67.8 million people have received at least one vaccination, and with 7.6 per cent of the population fully vaccinated, the nation is on the lower side of injection rates.
Lion Air predominately serves 38 destinations across Indonesia and only one international destination in Fuzhou, China.
The latest outbreak will continue to damage the airline’s core routes, as regions increasingly rise in infections.
Indonesia’s outbreak has been climbing since October last year, and is now one of the epicentres of the virus.
Tight restrictions in Bali, Java and other popular tourist destinations were slammed with tight restrictions since early July, stumping major travel hubs.
Indonesia is stuck on the highest level of restrictions, extended to August for regions outside of Java, categorised as ‘Level 4’ areas.
Bali was set to reopen to international tourists last week, but will now remain closed.
The decision comes only a year after the carrier furloughed 2,600 contract workers as flight traffic was at its lowest in July 2020.
National flag carrier Garuda Indonesia furloughed roughly 800 contract workers for months last year to avoid permanent layoffs and sustain the airline during the pandemic.
Last year, Lion Air reported a total revenue decrease of 44.8 per cent, to US$10.2 million from US$18.5 million in the previous year, with a net loss of US$3.4 million.
