Air Serbia to reduce workforce and wages
Air Serbia plans to offer financial incentives to encourage employees to voluntarily resign, with the company seeking to reduce its headcount by some 300 staff members as a result of the coronavirus pandemic. Furthermore, employees have been told their wages will be reduced starting from December 2020 until March 2021. The amount will depend on the employee’s pay grade. The company informed its staff last week that it has been reducing its costs for the past eight months in order to mitigate the effects of the pandemic but that it is no longer able to take on such high expenses, resulting in voluntary redundancies and pay cuts. The airline introduced a hiring freeze in March.
Over the past few months, Air Serbia has rationalised its fleet and renegotiated leasing terms for its aircraft, with power by the hour contracts concluded, where leasing costs are accounted based on the number of hours the aircraft has been utilised rather than a fixed rate. The company has reduced airport fees at a select number of destinations and managed to defer air navigation tax payments until 2021. It launched a program entitled “Deliver” back in March, aimed at reducing capital investments and services which are not of vital importance for the company. Furthermore, it has used the suspension of slot rules in Europe and the United States, as well as its primary markets, to secure the same slots for 2021. The Serbian carrier has secured credit lines from commercial banks up until December 31 and has deferred deposit requests from several airports.
The situation on the market remains unstable as many countries go into a winter lockdown, while evolving travel restrictions continue to reduce demand. As a result, Air Serbia has halved its network of 63 destinations. However, the company has said it is satisfied with load factors on a number of routes, which have in some cases reached 80% during the third quarter. “Thanks to our flexible and swift response, during the third quarter, Air Serbia managed to improve its average cabin load factors compared to the competition. On selected routes, loads reached 80%, which can be considered a good result during the biggest crisis in the history of commercial aviation”, the airline said in a statement. The Serbian government is expected to grant Air Serbia aid of around 150 million euros this year, although the state is yet to announce an official figure.
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