National carrier Vietnam Airlines has forecast a drop of VND50 trillion (US$2.1 billion) in 2020 revenue due to the novel coronavirus disease (COVID-19) pandemic, leading to some 10,000 job cuts.
In a letter sent to employees, the airline’s CEO Duong Tri Thanh said that it is unprecedented that the airline is currently grounding 100 out of 106 aircraft in its fleet.
The executive said that the airline has suspended all international routes from 7:00 am on March 25 and maintained only a number of domestic flights connecting Hanoi, Ho Chi Minh City, and Da Nang.
Vietnam Airlines thus expects to cut services by 60 percent and see its revenue slipping by VND50 trillion, or 65 percent of its targeted revenue in 2020.
“Like other airlines, we are facing vital challenges to our business operations,” Thanh said in the letter.
“There have been more than 2,000 airline personnel, including over 400 corporate leaders and officials at all levels, being isolated [due to COVID-19],” he added.
“Four employees of Vietnam Airlines have been infected [with the virus].”
To overcome this “difficult period,” Thanh said Vietnam Airlines will restructure its workforce, streamline its staff, and reorganize its apparatus.
Adjusting employees’ income, cutting all non-urgent expenses, spacing out or delaying expenses where possible, and initiating negotiations for unit price reduction and discounts on signed contracts are among measures the flag carrier looks to take in the coming period, Thanh said in the letter.
These measures will undoubtedly affect all employees working for Vietnam Airlines as all employees have had their salaries reduced while more than 50 percent of them, or roughly 10,000 people, have had to temporarily stop working.
More than 1,500 Vietnam Airlines flight attendants have taken voluntary unpaid leave.
According to statistics, Vietnam Airlines Group hire more than 20,000 officials and employees, including 1,200 pilots, 2,500 aircraft engineers, and 3,000 flight attendants.
The Civil Aviation Authority of Vietnam last month estimated that the country’s airlines would suffer losses totaling VND30 trillion ($1.26 billion) this year due to the COVID-19 epidemic.
But the forecast revenue loss of Vietnam Airlines alone has already outnumbered the VND30 trillion prediction.
Vietnam has confirmed 233 cases of COVID-19 infections so far, with 85 having recovered and been discharged from the hospital.
No fatality has been reported in the country.
The nation has banned all four-wheeled commercial passenger vehicles while keeping only a handful of domestic flights and railway trips a day for 15 days, between April 1 and 15, as part of the nationwide implementation of social distancing to curb the transmission of COVID-19.
Vietnam’s Prime Minister Nguyen Xuan Phuc declared COVID-19 a nationwide infectious disease pandemic on Wednesday.