Business InsiderTop News

Latin America’s largest airline to halve pay for its 43,000 employees

imageStock Markets6 hours ago (Mar 19, 2020 04:45PM ET)

(C) Reuters.

By Marcelo Rochabrun

(Reuters) – Latin America’s major airlines sharply curtailed international flights on Thursday because of the coronavirus outbreak as Panama and Colombia imposed month-long travel bans and the largest carrier cut the salaries of 43,000 employees.

The bans by Panama and Colombia, effective on Monday, came after Peru, Argentina and Chile, among others, severely curtailed flights.

The measures intensified pressure on the region’s airlines, whose shares have tumbled more than their peers in other countries.

Chile-based LATAM Airlines Group, the continent’s largest, said it would halve the salaries of its 43,000 employees and its new chief executive would forego his salary for three months.

The region’s No. 2 airline, Colombia-based Avianca Holdings (CN:AVT_p), said it was canceling all its international flights and four out of five domestic flights in Colombia.

Avianca will go to flying just 10 planes, half of which are small turboprops, from 142.

Mexican airline Aeromexico is slashing its domestic flight capacity by 35% and international capacity by 50%, which meant grounding 40 aircraft immediately, according to an internal company memo seen by Reuters.

Panama-based Copa Airlines, the No. 3 Latin American carrier by international flights, faced an unprecedented crisis as Panama shut down international flights through its main hub.

Virtually all of Copa’s flights go through Panama City’s airport. Copa declined to comment.

Brazil’s largest domestic carrier, Gol Linhas Aereas Inteligentes, said on Thursday it would cut worker pay by 35% and executive pay by 40% “initially” for three months.

The developments left Latin America’s airlines facing an uncertain future and stranded many passengers who were unable to book flights to get home. The coronavirus pandemic has sickened more than 240,000 people globally and killed more than 9,800.

The region’s exception was Brazil, which has shut down land borders but not air travel. Thursday’s developments added to many cuts already announced.

LATAM is planning to cut 70% of its flights, and Copa at least 80%, as Latin American countries have shut their borders to air travel.

Gol has slashed half its flights, but the carrier is more focused on travel within Brazil, which is not directly affected by cross-border bans.

Avianca declined to comment on potential salary cuts.

Cutting executive pay has been a common response to the coronavirus, which has upended life around the globe.

Brazilian airline Azul SA said last week it would offer some workers unpaid leave and cut executive pay by 25%.

Delta Air Lines (NYSE:DAL) CEO Edward Bastian said he would also forego his salary through the outbreak. Delta owns a 20% stake in LATAM.

Latin American airlines slash flights, salaries in response to coronavirus

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Articles

Back to top button