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Cleared for layoffs? AirAsia to retrench 20% of workforce in major cost-cutting move
This allegedly involves cabin services, cargo and logistics, engineering and maintenance, as well as the commercial division, according to Scoop’s source
KUALA LUMPUR – AirAsia Bhd is expected to retrench 20% of its current workforce as part of an ongoing restructuring exercise, set to be completed by August this year.
Departments allegedly affected include cabin services, cargo and logistics, engineering and maintenance, as well as the commercial division.
The company, which employs over 30,000 staff across its regional subsidiaries – including AirAsia X, Indonesia AirAsia, and Asia Aviation Public Company Limited (Thai AirAsia) – is said to be making these changes to align operational costs with annual revenue.
A source within the aviation industry revealed to Scoop that the restructuring is necessary to ensure the airline’s employee expenditure is aligned with its annual income.
As of now, AirAsia’s total annual compensation expenditure for employees is not publicly disclosed.
However, Scoop’s checks on salary comparison websites such as Comparably found that the estimated average annual salary of an AirAsia employee is approximately US$30,000 (around RM141,000).
With a current workforce of over 30,000, the airline could be spending up to US$900 million (approximately RM4.23 billion) annually on salaries alone.
As of 2024, AirAsia reported a revenue of RM3.2 billion, up from RM2.5 billion in 2023.
AirAsia Bhd is expected to retrench 20% of its current workforce as part of an ongoing restructuring exercise, set to be completed by August this year. – Scoop file pic, May 23, 2025
“AirAsia is compelled to retrench 20% of its workforce due to unstable revenue over the past two years.
“The increasing headcount has skewed the financial balance, sometimes forcing the company to spend more than it earns,” said the source.
“The company is now aiming to increase its annual revenue to between RM 5.5 billion and RM 7 billion by 2026 – that is the immediate target.
“Paperwork is currently underway for the retrenchment, and official announcements are expected by August. Some employees have already started seeking new opportunities,” the source added.
Simultaneously, the airline is also working on implementing a Performance Improvement Plan (PIP) for its employees.
“The PIP will be introduced by AirAsia to ensure employees meet expected performance standards and to help underperforming staff improve within a defined timeframe.
“This is also to ensure the remaining workforce is more efficient, productive, and aligned with the company’s long-term goals,” the source explained.
Reports indicate that AirAsia has conducted retrenchment exercises in the past, particularly during the Covid-19 pandemic, which heavily impacted the global aviation industry.
In June 2020, AirAsia laid off over 300 employees, including cabin crew, pilots, and engineers, as part of its cost-cutting measures.
Later that year, in September, the airline announced another wave of layoffs, involving several hundred more staff.
By October 2020, AirAsia and its long-haul affiliate, AirAsia X, confirmed the retrenchment of 10% of their combined 24,000-strong workforce, amounting to approximately 2,400 employees.
In April 2021, Group CEO Tony Fernandes stated his intention to rehire all retrenched staff once the airline’s business recovered.
Some former employees were later offered roles within the company’s agriculture e-commerce venture, Ourfarm Asia Berhad, which has since ceased operations. – May 23, 2025
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