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Straits Times 24.02.04
SIA pilots pledge amicable solution
'What we have agreed with the company will be honoured'
By Zuraidah Ibrahim
SINGAPORE Airlines pilots appear to have averted a showdown with the Government after assuring Senior Minister Lee Kuan Yew that they want to settle their differences with management amicably.
That commitment is clear in an exchange of letters between them, which Mr Lee made public last night.
Pilots union chief Mok Hin Choon has promised that the union's approach will be one of 'cooperation and not confrontation'.
'We will keep it 'in the family' and avoid, as far as possible, taking the issue public and airing it in the media,' he said in his Jan 16 letter.
Replying on Feb 9, Mr Lee welcomed that positive approach, saying he was encouraged by their commitment to work with management and negotiate 'in the family'.
He is expected to meet the pilots this week.
The letters come after three months of stern warnings by the Government that it would not countenance a defiant pilots' union.
It had viewed with alarm the SIA pilots' ouster of their union leadership last November, a move which suggested that the union was preparing to take a more confrontational line and become more militant in its demands.
Captain Mok became president of the new team that was elected.
Over the months that followed, Mr Lee warned the pilots on at least three occasions to rethink their stance.
In his Jan 16 letter, Capt Mok said he believed Mr Lee's 'timely intervention' would result in a workable framework for SIA.
Making clear that his team would not press for restoration of pre-Sars salaries, a widely expected move, he said: 'What we have agreed with the company will be honoured.'
His council supports a more flexible wage structure as laid out by the National Wages Council and, he promised, will not benchmark pilots' salaries against those of the most highly paid international pilots.
These commitments are significant as the pilots and management are negotiating a new collective agreement as the last one expired in December.
Noting what Capt Mok had pledged would help keep SIA competitive, Mr Lee explained in his reply that he had intervened because he believed something was fundamentally wrong when the union members disavowed an agreement over wage cuts which they had earlier endorsed.
'That they did so betrayed a lack of appreciation of the severe challenges SIA and our aviation industry are up against,' Mr Lee said.
He noted that SIA needed to earn at least $900 million in after-tax operating profit just to cover its cost of capital. As a group, it had to make at least $1.4 billion after tax.
While this was not easy, it could be done if everyone worked together, he said.
He favoured a flexible wage structure that enabled pilots and all other staff to share in the profits of the company. They should also move away from seniority-based wages and peg more of their pay to company and individual performance.
He also set out the aviation landscape that had been permanently changed with the emergence of low-cost carriers, more open skies in Asia, new long haul carriers that could bypass Singapore and SIA-wannabes emulating its services. There may even be low-cost long-haul carriers, he said.
'These changes will erode SIA's position as a price leader out of Singapore. SIA will become a price-taker, and not a price-maker.'
It may no longer be able to charge a large premium and its yields will go down.
Against such a backdrop, for SIA to succeed, there must be a new climate of mutual confidence and partnership between management and the pilots union.
'Both have to break with the past,' he said, adding that now with a new chief executive officer and new union leadership, there was an opportunity for a fresh start.
With his letter, Captain Mok also attached a note detailing six sets of grievances that he said had hit morale.
These included the pay cuts which pilots had to take during Sars and hearing 'insensitive' news that management was removing caps to its share options; the pay cuts they took after the 9-11 terror attacks; the increase in management numbers while pilots were told to be lean; and the retrenchment criteria of pilots that did not put Singaporean pilots above those overseas.
Mr Lee, who said he did not consider either SIA management or the pilots union to be blameless, has passed the list to management for both sides to iron out, failing which, they should opt for adjudication to 'minimise bruising contests of wills and festering suspicions'.
He also urged the union to adopt the principles of tripartite cooperation if it wanted to help strengthen SIA.
It would not succeed if it tried to work against the system as 'the system is too...well established to be broken'.
Mr Lee reiterated the Government's commitment to maintaining Singapore's airport hub status and SIA was expected 'to outlast the competition'. 'It may have to incur losses but Changi and SIA are going to stay the course.'