Arik Air has asked 90% of its staff to embark on unpaid leave.
This is in addition to an 80% salary cut for the month of April.
According to an internal memo signed by Roy Ilegbolu, Arik Air CEO, the unpaid leave would begin on May 1.
Airlines in the country have suspended operations after the federal government announced a closure of all airports in the country to curb the spread of the coronavirus.
On March 18, when Nigeria had recorded eight COVID-19 cases, Arik Air announced a suspension of its flights to Ghana, Liberia and Senegal.
Ilegbodu said the company has suffered a decline of over 98% in revenue since scheduled flights were suspended.
He said the human resources department will review situation on a monthly basis and communicate any new development.
He said the condition is further worsened by the decline in the value of the naira.
“Added to this is the rapid decline in the value of the naira by over 35 per cent against the benchmark and with oil prices now falling well below $15 per barrel, it is evident that we must, without further delay, take decisive action to preserve our organisation,” the memo read.
“Our focus as management has always been hinged on the well-being and safety of our staff, managing our liquidity as an organisation and creating the opportunity to ride out of inclement circumstances such as the one we are faced with today.
“Pursuant to this, recently, we reached out to our suppliers, specifically negotiating reduced rates on all our contracted services and mitigating operational expenses due to changes in demand. We also implemented contingency plans for staff and introduced operational support flexibility.”
The International Air Transport Association (IATA) estimates that the pandemic has put 125,400 jobs at risk and led to a $0.99 billion revenue loss for Nigeria’s aviation industry.