Jazeera Airways Co. of Kuwait laid off about 300 employees, or about a third of its workforce, in an effort to cuts costs as the coronavirus batters the airline industry.
The low-cost airline is also talking to its lessors to try to defer or waive charges for as long as the pandemic persists, Chief Executive Officer Rohit Ramachandran said by phone.
The company has about $100 million in cash reserves and isn’t currently talking to banks about financing or seeking government aid, he said.
“We have many untapped lines of credit that we have the ability to call upon because of a strong balance sheet,” Ramachandran said. The company’s entire management team has taken a 50% pay cut since February, while the CEO isn’t receiving a salary at all, he said.
Airlines are taking a beating from the pandemic-induced collapse in travel demand. Japan Airlines Co. posted its first quarterly operating loss in at least eight years and suspended its annual dividend. Germany’s government is seeking a 25% stake in Deutsche Lufthansa AG in exchange for a financial bailout, according to people familiar with the matter.
Closer to home, Emirates and Etihad Airways, both based in the United Arab Emirates, are warning that 85% of the world’s airlines face insolvency by the end of the year without government intervention.
Jazeera may report a loss for this year, Ramachandran said.