SINGAPORE, June 20 — Pilots at Singapore Airlines (SIA) have agreed to take no-pay leave as well as a pay cut from July 1, the latest in a string of cost-cutting measures as the global airline industry takes a battering.
The carrier also said its management staff and board of directors have agreed to a pay cut of at least 10 per cent, which, all up, will help SIA save about S$21 million (RM51 million) in costs this financial year.
An agreement between SIA and the Air Line Pilots Association-Singapore (Alpa-S) was finally signed on Thursday after months of tough negotiations.
Under the agreement, the pilots – more than 1,800 of them – will take one day of no-pay leave each month and a cut of 65 per cent of one day’s pay a month, pro-rated from their monthly basic salary, SIA said in a statement yesterday.
The official agreement comes more than a month after an interim deal was reached, where its pilots agreed to take one day of compulsory leave a month.
“We reached this agreement with two objectives – to help the company remain profitable and to save jobs,” said Captain P. James, Alpa-S president.
Said SIA: “The terms of the agreement with Alpa-S were determined by the surplus in pilot resources arising from the reduced flight schedules,” as the airline had cut back flights following the sharp fall in demand for air travel.
It earlier announced plans to decommission 16 aircraft and operate fewer flights by March next year.
From next month, all SIA management staff will take a pay cut of at least 10 per cent, while its chief executive Chew Choon Seng will have a pay cut of 20 per cent.
SIA was unable to say at press time how many management staff will be affected by the slash in wages.
As a rough guide, Mr Chew earned between S$3.25 million and S$3.5 million in the year ended March 31, 2008, according to the airline’s 2008 annual report. Basic salary formed 38 per cent of the total. The rest came in bonuses and benefits.
The board also volunteered a cut of 20 per cent in director fees.
In April, senior management staff went on a shorter work month scheme, joined by ground personnel, cabin crew and administrative officers in May.
Almost 2,000 employees have also signed up for SIA’s voluntary no-pay leave scheme where staff can apply for no-pay leave of up to two years.
SIA’s latest measures mirror those of its aircraft maintenance unit SIA Engineering which announced very similar cost-cutting measures on Tuesday.
So far, the capacity cuts by SIA, including termination of services to Los Angeles (via Taipei) and Osaka (via Bangkok), among others, have not been enough to counter a slump in air travel. SIA passenger numbers last month fell by almost 24 per cent from the same period last year to about 1.2 million, outpacing an almost 14 per cent cut in capacity.
The airline’s passenger load factor also fell to about 67 per cent, down almost eight percentage points year-on-year.
Overall cargo traffic for May also fell by about 20.7 per cent, slightly less than the cut in capacity of 21.4 per cent.
Other airlines have taken similar measures amid the travel slump - expected to cause airlines worldwide to lose US$9 billion (RM31.5 billion) this year, according to the International Air Transport Association.
Hong Kong’s biggest carrier Cathay Pacific said last month that about 90 per cent of its pilots had signed up for unpaid leave.
Australia’s largest carrier Qantas Airways said in April it cut 1,750 jobs amid a drop in business and first-class travel. – The Straits Times
Show/Hide comments
Show/Hide comment form
