Travel bans to and from Manila and in key provinces forced Cebu Pacific to lay off over 150 cabin crew members.
Notices sent to probationary workers seen by CNN Philippines revealed that the budget airline terminated the employment contracts of select flight personnel after it was “forced to scale down and suspend flight operations” due to travel restrictions covering Metro Manila, as well as key provinces and cities in the country.
The airline had to cancel flights to mainland China, Hong Kong and Macau since early February after the Philippine government-issued travel bans to these areas hard hit by the disease known as COVID-19. This was eventually broadened to cover North Gyeongsang province of South Korea, until the month-long Metro Manila quarantine forced Cebu Pacific to cancel all flights to and from the Ninoy Aquino International Airport, the country’s main transport hub.
The airline confirmed the layoffs. One employee estimates around 180 crew members might be let go.
“As we foresee fewer flights and reduced operations in the coming months, we will have less requirement for flying staff. Given this situation, it is a difficult decision but we are letting go of our newly hired cabin crew because fewer flights mean less time and opportunity for them to gain inflight experience. It is painful, but necessary action to take to cope with the impact of COVID-19,” Cebu Pacific said in a statement, saying that newly-hired cabin crew members would be let go after Thursday, March 19.
In its letter to employees, Cebu Pacific said the aviation sector was “facing a crisis of proportions” amid the COVID-19 pandemic, paralyzing tourism as countries scramble to contain the spread of the disease.
Cebu Pacific said it would be “unable to support the regularization of any further employees,” and is forced to end work contracts. Among those who received the letters were cabin crew members hired late September 2019, which meant that they were supposed to be regular employees by next week.
The Gokongwei-led airline also bared a separation package for these displaced employees. It includes a separation pay equivalent to two months’ salary, two free roundtrip tickets, a return ticket to their home province or city, and a waiver of charges for training bond, uniforms, and accessories. The company also promised to “fast-track” the selection of that employee should the airline start hiring flight attendants again.
Just last week, Gokongwei-owned media company Esquire reported that members of Cebu Pacific’s senior management opted to cut their own salaries to avoid layoffs.
Cebu Pacific made ₱3.9 billion in 2018, just half the ₱7.9 billion it made the prior year.
Last month, Philippine Airlines said it laid off 300 workers as the flag carrier owned by tycoon Lucio Tan seeks to trim losses. The country’s biggest airline said it let go of administrative and management staff to increase revenues and reduce costs, especially after PAL ended 2019 at a loss, only to be aggravated by travel bans and flight cancellations due to the coronavirus.
Other airlines worldwide have counted hefty losses brought about by the pandemic. CNN International earlier reported that Hong Kong flag carrier Cathay Pacific asked its 27,000 workers to take three weeks off without pay to preserve cash and keep the airline afloat.