April 14, 2024


World Business Inquiries

COVID-19 impact: Firm servicing airlines to lay off 400 workers

3 min read

A company servicing ground handling needs of airlines is laying off 400 workers as the fallout from the COVID-19 pandemic extended beyond the airline industry into allied sectors.

Among those losing their jobs at 1Aviation Groundhandling Services Corp. are newly-hired workers including check-in agents, boarding gate agents and baggage handlers, who have yet to be given regular employment status, the company said on Thursday (April 2).

The workers facing displacement represent about 8 percent of the workforce of the company, a venture between Cebu Air Inc, owned by the Gokongwei family, and Philippine Airport Ground Support Solutions Inc., owned by businessman Jefferson G. Cheng.

A company spokesman said the workers’ last day of employment would be on Friday (April 3).

“It’s a painful decision that we have to make,” said the company, whose biggest client is Cebu Air’s Cebu Pacific, the country’s largest budget carrier.

It said the employees were given a package equivalent to two months pay, which it explained was above the legal requirement.

“If the business picks up in the future, we also assured them that they will be prioritized in the hiring,” the company said.

The COVID-19 crisis has dealt a severe blow to the airline sector.

The country’s local carriers have grounded all flights after the Philippine government ordered an enhanced community quarantine in Luzon to contain COVID-19’s spread.

The quarantine is expected to be lifted by the middle of April, but doubts remain over how soon demand for air travel will recover.

“Today, it has become clear we do not know when the airline industry, on which our business depends, will be able to resume its operations at its pre-COVID-19 levels,” the company said.

A competitor of 1Aviation Groundhandling Services, MacroAsia Corp., had already implemented an unpaid leave scheme for its workers while Philippine Airlines (PAL) and Cebu Pacific have cut nearly 500 jobs over the past two months.

The Air Carriers Association of the Philippines (Acap), composed of PAL, Cebu Pacific and AirAsia Philippines, asked the Philippine government for emergency loans and debt guarantees to help prevent their businesses from collapsing.

Acap vice chair Roberto Lim said the three carriers have paid out P7 billion in refunds so far while operating costs are fixed at about P8 billion per month. Almost all revenues have vanished with their fleets grounded.

But Finance Secretary Carlos G. Dominguez III had said the government’s priority in its stimulus plan were workers who were rendered jobless by the enhanced COVID-19 quarantine and appeals by businesses for help could be discussed “later.”

Edited by TSB

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