SIA to implement COVID-19 cost-cutting measures, up to 7 days no-pay leave a month for pilots

SIA to implement COVID-19 cost-cutting measures, up to 7 days no-pay leave a month for pilots

FILE PHOTO: A Singapore Airlines plane sits on the tarmac at Singapore's Changi Airport
FILE PHOTO: A Singapore Airlines plane sits on the tarmac at Singapore's Changi Airport March 11, 2020. Picture taken March 11, 2020. REUTERS/Edgar Su/File Photo

SINGAPORE: Singapore Airlines (SIA) pilots will be required to take some days of no-pay leave a month from April as part of cost-cutting measures the national carrier is putting into place. 

In an internal email dated Mar 24, seen by CNA, the airline said it had signed agreements with the Singapore Airlines Staff Union, the Air Transport Executive Staff Union and the Airline Pilots’ Association - Singapore (ALPA-S) to implement such cost-cutting measures. 

Captains will have to take seven days of compulsory no-pay leave.

First officers will have to take five days of no-pay leave a month, while second officers will have to take four days of such leave each month.

"These measures together with no flying being done will result in an average of up to 55 per cent salary cuts for captains, up to 50 per cent cuts for first officers and up to 15 per cent cuts for second officers," said ALPA-S president Captain Kenneth Lai.

He noted that this represents a percentage of pilots' total monthly salary package, which includes both a basic salary and a variable component.

Meanwhile SIA executives and associates will have to take one day of no-pay leave in April, and two days of no-pay leave in May. 

The measures are aimed at addressing “the current manpower surpluses due to the deep capacity cuts that had been announced thus far”, the message read. 

Airlines across the world have been badly hit in recent months, following travel restrictions put into place by many countries to stop the spread of the COVID-19 outbreak.

The International Air Transport Association (IATA) warned the COVID-19 pandemic could cost passenger airlines up to US$113 billion (S$162.7 billion) in lost revenue this year. 

Separately, the CAPA Centre for Aviation said coordinated government and industry action was necessary to avoid the possible outcome of “most world airlines” becoming bankrupt by end-May this year, as a result of travel restrictions. 

READ: COVID-19: SIA reaches agreement with unions for cost-cutting measures affecting 10,000 employees

READ: COVID-19: Singapore Airlines slashes 96% of capacity, grounds most planes

Tuesday’s email noted that while SIA will continue to offer re-employment contracts to eligible staff beyond the age of 62, re-employed ground staff will have to go on a three-month leave-of-absence without pay, beginning May 1. 

This will also apply to cabin crew who are re-employed beyond their retirement age, as well as contract staff whose terms are extended beyond their final contract terms. 

Pilots who are re-employed beyond the age of 62 will have to take a six-month leave-of-absence without pay, beginning April 1. 

These measures come after the airline group announced on Monday (Mar 23) that it was cutting 96 per cent of its capacity and grounding 138 planes from SIA and its regional subsidiary SilkAir, out of a total fleet of 147.

“SIA has reached agreements with our unions for a set of cost-cutting measures. These include varying days of compulsory no-pay leave every month for pilots and ground staff. There will also be a temporary furlough for staff on re-employment contracts,” said SIA in response to media queries. 

READ: Singapore aviation industry 'extremely vulnerable' to fallout from COVID-19, say experts

READ: Commentary: COVID-19, the biggest crisis ever for Singapore’s aviation industry and Singapore Airlines

An SIA spokesperson also confirmed that its management team would take deeper pay cuts than previously announced as part of its cost-cutting measures. 

From Apr 1, the base salary of its chief executive (CEO) would be cut by 30 per cent, while executive vice-presidents will see a 25 per cent cut and senior vice-presidents a 20 per cent cut. 

Divisional vice-presidents and vice-presidents will see a 12 per cent pay cut. 

A previously announced 5 per cent pay cut for senior managers and managers would be brought forward to Apr 1, and subsequently increased to a 10 per cent pay cut from May. 

“In solidarity with the company, the Board members have decided to take a 30 per cent cut in their fees,” the airline said. 

“We must all brace for even greater sacrifices going forward, given the uncertainty over how long the Covid-19 outbreak will continue to ground our business,” SIA added. 

In an internal memo to staff on Monday, the airline’s group CEO Goh Choon Phong described the ongoing COVID-19 situation as “the greatest challenge in the SIA Group's existence".

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Source: CNA/az(mn)

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