To cut costs, MAS offers staff 2 years’ unpaid leave

KUALA LUMPUR, May 22 — Malaysia Airlines (MAS) has offered a maximum of two years of unpaid leave to its Malaysia-based employees as the flag carrier works out strategies to cut costs and seek RM6 billion to fund a re-fleeting programme after losing RM2.52 billion last year and aborting a share swap with competitor AirAsia.

The Malaysian Insider has sighted an email dated May 18, 2012 from the MAS Human Capital division giving all staff up to June 30, 2012 to apply for the “Voluntary Leave Programme (VLP) 2012”. The programme is only for permanent MAS employees, excluding those in the MASWings division, MASWings Sdn Bhd and Firefly.

File photo of a MAS aircraft at the Kuala Lumpur International Airport in Sepang. MAS employees have been offered the option of unpaid leave for the second time in recent times.

“As we all are aware, our Company is still in financial crisis despite many measures taken to combat all odds to contain costs. We are in a serious survival mode which immediately calls for strong measures on costs control and reduction initiatives.

“Given the current financial situation, the Company has decided to reactivate the Voluntary Leave Programme (VLP). This programme provides an opportunity for staff to take a break from employment for a certain period of time for personal reasons whilst still having the assurance of continued employment with Malaysia Airlines,” according to the email issued by Zahrah Zaid, the executive vice-president of human capital in MAS.

This is the second time in recent times that MAS employees have been offered the option of unpaid leave. The first was during Datuk Seri Idris Jala’s time as the airline’s managing director when about 300 people took up the option. Some 2,600 others were laid off under a Voluntary Separation Scheme (VSS) in 2005, funded by the Treasury.

In March, Singapore Airlines also offered no-pay leave to its pilots for as long as two years, just weeks after the carrier reported a 53 per cent drop in net profit during the last three month of 2011 compared to a year earlier. The carrier said that its growth had been slower than expected, resulting in a “surplus pilot situation”. It had said the pilots who opt for the scheme will be allowed to work for other carriers during the period.

French newspaper La Tribune reported yesterday that Air France plans to lay off between 2,500 and 3,000 of its employees by the middle of the summer, while Le Figaro said 5,000 employees out of a total 10,300 employed by the Air France-KLM group will be laid off by 2015.

For MAS, the current VLP will allow its employees to take either a minimum of 12 months or 24 months’ leave, according to the email, which also said the staff could also apply for further leave at the discretion of the airline.

“Staff will return and report for duty upon expiry of their VLP period. The Company will endeavour to assign the staff to his/her previous position subject to availability of the position or may be assigned to another position of the same grade/level within Malaysia Airlines Group at the discretion of Management,” the email said.

It also listed out a series of benefits for those applying for the VLP, including concessional travel, medical benefits and the flexibility to work in other organisations with the company’s approval.

“The VLP is applicable to all Malaysian-based permanent staff irrespective of years of service or age. It is absolutely voluntary and no one will be forced or coerced by anyone to apply for this programme,” according to the email.

It also said respective heads of department or division will have to recommend approval for the VLP but the final decision will be made by the management after ensuring there will be no replacement or recruitment to fill the vacant post and that the vacancy will not affect business operations.

MAS has eight unions and associations representing slightly more than 20,000 employees, which is double the staff strength of AirAsia, Asia’s biggest budget carrier with an extensive fleet operating in Malaysia, Indonesia, Thailand, Japan and the Philippines.

The offer for no-pay leave came just two weeks after unions’ dissatisfaction aborted the MAS-AirAsia share swap just nine months after the deal was hailed as the best way to save the loss-making flag carrier, which has gone through at least two business turnaround plans in the past decade.

Sources had told The Malaysian Insider that Putrajaya’s insistence to ensure no job cuts in MAS before the next general election and workers unhappy with AirAsia executives managing the national carrier had all but made sure the pact would not take off successfully.

The unwinding of the share swap on May 2 saw MAS main shareholder Khazanah Nasional Berhad transfer its 10 per cent or 277,650,600 ordinary shares in AirAsia back to Tune Air Sdn Bhd, while Tune Air transferred its 20.5 per cent or 685,142,000 ordinary shares in MAS back to Khazanah. The reversal was a cashless deal and based on the same swap ratio of 2.05 based on the prices when the share swap was announced in August 2011, where MAS was valued at RM1.60 per share and AirAsia’s share at RM3.95.

MAS is expected to take delivery of its first of its six Airbus A380 next month after several years of delay in getting the world’s most advanced mega airplane. It is still taking delivery of more of the Airbus A330-300EX and the Boeing B737-800.