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

By Marcelo Rochabrun

(Reuters) – LATAM Airlines Group , South America’s largest carrier, will cut pay to its 43,000-strong workforce by 50% for three months due to economic fallout from the coronavirus outbreak, a source close to the situation told Reuters on Thursday.

The pay cuts will affect employees worldwide, but LATAM’s operations are concentrated in Chile and Brazil.

The company’s incoming chief executive, Roberto Alvo, will also forego his entire salary, the source said. He assumes his position April 1.

The pay cuts were expected to be announced later on Thursday.

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

The paycuts in the industry come amid an unprecedented crisis.

LATAM has said it will cut 70% of its flights as countries in Latin America have shut down their borders to air travel and demand has plummeted. Gol has slashed its flights by 50%, but it is much more focused on domestic flights within Brazil, which have not seen as much disruption as international flights.

Colombia announced Thursday that it will ban international flights for a full 30 days, the most drastic travel ban announced in the region so far.

Cutting executive pay has been a common response in the airline industry.

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

The CEO of Delta Air Lines Edward Bastian said he would also forego his salary through the outbreak. Delta owns a 20% stake in LATAM.

(Reporting by Marcelo Rochabrun, Editing by Franklin Paul, David Gregorio and Marguerita Choy)