SIA announces deeper pay cuts
Singapore Airlines (SIA) has announced deeper pay cuts for management staff, and compulsory no-pay leave for other employees including captains who will now have to take a week off every month.
For now, there are no plans for retrenchments, The Straits Times understands.
SIA announced yesterday it was cutting 96 per cent of its scheduled capacity till the end of next month and grounding 138 out of 147 SIA and SilkAir aircraft.
The group's low-cost unit Scoot will also suspend most of its network, resulting in the grounding of all but two of its 49 aircraft.
Hours after the announcement, SIA chief executive Goh Choon Phong issued a staff circular on the latest cost-cutting moves.
In the note seen by ST, he said SIA management will take a second round of pay cuts. Instead of 15 per cent as previously announced, Mr Goh said he will take a 30 per cent cut from April 1.
Salary cuts for other affected senior staff will range from 10 to 25 per cent. SIA board members will take a 30 per cent cut in their fees.
Mr Goh added that the airline has reached an agreement with its unions on a set of cost-cutting measures. These include varying days of compulsory no-pay leave every month for pilots, executives and associates; as well as furlough for staff on re-employment contracts.
The measures will impact about 10,000 staff.
Before the latest measures, SIA had already rolled out a voluntary no-pay leave scheme to staff, including cabin crew.
As countries around the world impose increasingly tight border controls to contain the spread of Covid-19, airlines have been hit hard.
SIA said it is especially vulnerable to international restrictions in air travel because it does not have a domestic segment.
"It is unclear when the SIA Group can begin to resume normal services, given the uncertainty as to when the stringent border controls will be lifted," the airline said in its statement.
UOB Kay Hian's K. Ajith said SIA could potentially lose more than $140 million next month, and could be in a precarious position by end-June without financial help from the Government.
The Centre for Asia-Pacific Aviation has also estimated that about half of all global airlines could disappear before the year-end as casualties of Covid-19.