As many as 40% of planes of the national flag carrier Vietnam Airlines are being left idle and leaders' wages cut by 40% amid falling customers due to the virus outbreak.
Duong Tri Thanh, general director of Vietnam Airlines, announced the numbers during the meeting with the Committee for the Management of State Capital at Enterprises about the impact of Covid-19 outbreak on the economy on February 28.
Duong Tri Thanh, general director of Vietnam Airlines speaks at the meeting
"This is the worst situation that we've ever had in the local aviation industry," Thanh said. As China market closes, South Korea and Japan are the two most important markets for Vietnam in Northeast Asia. Moreover, the Italy outbreak has created more challenges for European flights.
In South Korea, starting from February 24, Vietnam Airlines evacuated many employees and only maintain a minimal number of employees working at its representative offices. The number of flights from Seoul and Busan with the Boeing 787 and Airbus 350 used to be six flights a day but has now been reduced to four flights a day using Airbus 321s.
"The aviation and tourism sectors are affected first and foremost. Previously, we estimated that the situation might pick up in the summer. But since pupils are given a long break from school, it's likely that there will be no summer holiday or peak season for travelling," he said.
China is the hardest hit. 3,300 out of 3,800 planes in China are being left idle and 30,000 pilots are not working. Average plane tickets have dropped by 70%. According to Thanh, the outbreak has hampered the development of the aviation sector by 3 to 4 years.
Vietnam Airlines can't rent out their planes either. "We were just about to complete the negotiation to rent 10 planes to our partner in the EU. But then they cancelled the deal because there is an outbreak in the EU too," Thanh said.
The carrier's current goal is how to maintain business and overcome this difficult time. Foreign pilots will take unpaid leave for two weeks. Vietnamese employees in other countries will take a two-week to one-month leave.
"The wages of the top leaders will be cut by 40% and 30% for lower positions. Employees will alternatively take a leave and wages will be cut by 20% gradually," he said.
About 20,000 employees are being affected by the outbreak, forcing the carrier to implement unprecedented solutions.
