COVID-19: Singapore Airlines offers cabin crew early release, retirement to further cut costs

SINGAPORE: Singapore Airlines (SIA) is offering its cabin crew members the option of early release or retirement, as it seeks to further cut costs and mitigate the impact of the COVID-19 outbreak.

The COVID-19 Voluntary Release Scheme is also open to cabin crew members who are on probation, and will come with payouts and benefits, an SIA spokesperson said on Wednesday (Aug 12). It is not applicable to trainee crew members.

The scheme was introduced in light of the adverse impact of COVID-19 pandemic and a "slower projected trajectory recovery for international air travel", the spokesperson added. 

Cabin crew members from both Singapore Airlines and SilkAir have until Aug 31 to apply for the scheme. 

“Applications are subject to approval and cabin crew who apply for the VRS will be informed on the outcome of their application by mid-September,” the spokesperson said.

Each application will be considered on its merits, with SIA taking into account operational requirements in its review of the applications, the spokesperson added. 

READ: Singapore Airlines to cut salaries by at least 10%, offers early retirement for eligible staff

The terms and benefits under the scheme were determined by SIA and the Singapore Airlines Staff Union, according to a notice sent out by the airline to cabin crew members on Wednesday. 

“We continue to work closely with our unions on the way forward where staff measures are concerned,” the spokesperson said. “We will announce any additional measures, if necessary, at the appropriate time.”

According to the notice, cabin crew members will receive varying benefits depending on their employment status and contract with the group.

READ: How COVID-19 is reshaping the way we’ll fly

Those still serving their bonds as of Aug 1 will have any outstanding bond repayment waived should their application to leave early be approved, according to the notice. 

They will also have any outstanding settling-in loans waived, and be accorded notice pay-in-lieu based on their basic salary at the point of departure, said the notice. Those still on probation will receive one month's basic salary while confirmed crew members will receive three months' pay. 

Meanwhile, cabin crew members serving the last year of their current contract will be able to receive pro-rated gratuity without having to complete their current contract. The gratuity amount ranges between S$4,000 and S$20,000, depending on their rank and how many contracts they have had with the group.

READ: Singapore Airlines reports S$1.12 billion net loss in Q1 as COVID-19 hits demand

The aviation industry has been among the hardest hit by the COVID-19 pandemic, as demand for travel plunged due to travel restrictions.

The International Air Transport Association, which represents about 290 airlines comprising 82 per cent of global air traffic, has said that it expects air traffic to return to pre-crisis levels only in 2024.

Traffic will fall by 63 per cent in 2020 compared to 2019, with a shortfall of US$419 billion in the sector due to the coronavirus crisis, it said earlier this month.

SIA has implemented various cost-cutting measures to mitigate the impact, including pay cuts and no-pay leave.

In May, SIA reported the first annual net loss in its 48-year history after COVID-19 crippled travel demand. Last month, the group reported a S$1.12 billion net loss for its first quarter performance.

Overall passenger carriage has plunged 99.5 per cent across its various airlines, and it is unlikely that group passenger capacity will recover to even half of pre-COVID-19 levels by the end of the financial year, said SIA last month. 

READ: Travel bans cannot be indefinite, countries must fight COVID-19 at home: WHO

On Monday, SIA announced that more than 6,000 of its 27,000 employees would take no-pay leave to help the airline deal with the impact of COVID-19. 

SIA has also cut the pay of all staff by at least 10 per cent, with senior vice-presidents having their pay cut by 30 per cent.

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