Thai Airways to cut salaries of employees
'Pay packages' to be given based on rank
Starting Saturday, employees of Thai Airways International (THAI) will cease work and take a pay cut, according to the national carrier.
The announcement made on Wednesday comes after the airline said it would suspend all flights due to duress caused by the Covid-19 outbreak, which has forced many countries to shut their borders.
Chakkrit Parapuntakul, THAI's second vice-chairman who is now the acting THAI president, said the suspension comes with a pay cut ranging from 10%-40%.
THAI said the emergency decree has caused restrictions at the border and thinned out passenger numbers which has forced the airline to stop its flights until the end of May.
The airline has taken necessary measures to prevent employees from working for the duration of the flight suspension. At the same time, the company has issued what it calls the "8502 relief code" to assist employees.
Instead of calling it pay cuts, the airline said it was rolling out "assistance pay packages" for employees across the board, plus remuneration.
The packages range from executive vice president (EVP)-level management employees, who will receive assistance money worth 50% of their monthly salary and vice presidents (VPs) who will receive assistance pay worth 60% of their salary.
The rest of the employees will be given different amounts of assistance pay proportionate to their monthly salaries. The amounts range from 90% of monthly salary for entry-level employees up to 20,000 baht a month to 60% of salary for those who make 100,001 baht a month and above.
The announcement overrides a policy released on March 13 which allowed employees to take voluntary leave without pay.
The airline added that staff members were free to decline the money or accept a lesser rate.
Meanwhile, Ditthanop Watthanawekin, an analyst at Capital Nomura Securities (CNS), said the Covid-19 outbreak is likely to cause Thai-registered airlines to suffer 66 billion baht in losses.
THAI will face the majority of the projected losses -- around 59 billion baht this year. That is a steep jump from its 12 billion-baht loss last year.
CNS has also forecast that tourist arrivals in the country will contract by nine million this year, which translates into a 58% slump in passengers.
A source at THAI said the national carrier is planning to seek approval from the Transport Ministry of its 80-billion-baht recapitalisation. The airline has enough liquidity for about two months, according to the source.