Eastar Jet to Lay off Dozens of Staff
09 May, 2020
Eastar Jet is likely to lay off a large number of personnel after a voluntary retirement program drew only around 60 applicants. The troubled budget carrier decided last month to lay off 22 percent of its 1,600 employees, and today its takeover by Jeju Air has been delayed, savings are a lot more urgent.
According to industry insiders on Thursday, Eastar Jet begged staff to use for voluntary retirement 3 x last month, but only 63 requested the severance package.
The goal is to shed 345 personnel and 186 non-permanent staff have been completely terminated. That leaves another 96 who'll have to be let go.
Eastar Jet's union is in talks with management to reduce the scale of layoffs by accepting company-wide pay cuts, so the redundancies could shrink.
The carrier hopes to complete the layoffs before it really is bought out by Jeju Air, which includes been postponed indefinitely from April 29 because the coronavirus epidemic delayed homework in Vietnam and Thailand. Industry watchers believe the acquisition will be completed by the finish of June.
Other carriers may possibly also lay off staff in this unprecedented crisis for the industry because wages will be the second highest proportion of fixed costs after fuel.
One airline executive said, "All domestic carriers sent employees off on paid or unpaid leave because that is the fastest way to reduce fixed costs. If earnings don't recover soon, we will need to lay off non-permanent staff first and then begin taking voluntary retirement applications from remaining staff."
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