SIA management to take up to 27.5% pay cut

[Wirraway]

Fri "Singapore Straits times"

SIA management to take up to 27.5% pay cut
Airline expects to save $12m with move for 240 staff; directors take 50% fee cut
By Rebecca Lee

SINGAPORE Airlines' management will take pay cuts of 22.5 to 27.5 per cent as the carrier copes with the worst crisis in its history, and faces its first quarterly loss in the wake of the Sars outbreak.

The wage cuts for 240 of the airline's 14,600 staff are to take effect on June 1, and are expected to save SIA $12 million a year.

Senior management - from senior vice-presidents up - will take a 27.5 per cent pay cut; and deputy managers to divisional vice-presidents will see their pay packets reduced by 22.5 per cent.

The cuts go far deeper than in 2001 when the airline industry went into a tailspin following the Sept 11 terrorist attacks on the US.

Then, the management staff also took the lead.

Their pay was cut by between 7 and 15 per cent.

And SIA's board of directors took a 30 per cent cut in their fees then.

This time around, the directors have decided on a 50 per cent cut.

'This is in line with measures being taken to reduce costs in response to a sharp decline in demand for air travel,' the airline said.

But SIA would not say how long the pay cuts would last or if they would be restored if business improves.

SIA spokesman Rick Clements declined to comment further.

But aviation analysts, including UOB Kay Hian associate research director Peggy Mak, said they expect the wage cuts will be permanent.

'The airline needs to re-model its whole business structure so that it can compete with the no-frills carriers,' she said.

Passenger traffic has nosedived by 62.8 per cent between the start of the year and mid-May.

Last month, SIA lost a stunning $204 million.

Although the wage cuts are a step in the right direction, industry observers said the $12 million savings are a mere 'drop in the ocean'.

As SIA's wage bill for its 14,600 staff came to $1.5 billion in the last financial year, there could be far greater savings if the airline cuts its wage bill across the board.

Its wage costs are second only to its fuel costs.

Salary cuts for other staff are being negotiated with the relevant unions, the airline said.

The Straits Times understands that SIA is asking rank-and-file employees to take a 15 per cent pay cut and pilots to take a 22.5 per cent hit.

Other measures, such as retrenchments and golden handshakes, are also said to be on the table.

Since May began, SIA's 6,600-plus cabin crew have been told to take seven days of no-pay leave every two months. That is estimated to yield the airline a savings of $14 million a year.

SIA's incoming chief executive Chew Choon Seng said at a media briefing on Wednesday that the company is looking to slash costs by at least $200 million.

Reacting to the news yesterday, a senior manager who has worked at SIA for 20 years said: 'I think everyone was expecting it.

'Really, there are no other options and we as managers have to be resilient.

'Painful as it is, we understand the situation.'
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Pic: Singapore Airlines 777-200 9V-SRF

http://www.jetphotos.net/viewphoto.php?id=85665

Photo: Wirraway
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[D.Lamination]

One in eighty people in Singapore works for SQ or affiliated companies.

Management sticking the knife in with permanent (as apposed to temporary while the SASR crisis works its way through) pay cuts is really defacto SIN govt. policy. This may finally stir the politically apathetic Singaporians to start to maybe, just a little bit, possibly "think" about voting for the opposition!:8

[Wirraway]

Tues "Singapore Straits Times"

SIA pilots refuse to budge on wage cut
By Ahmad Osman

PILOTS in Singapore Airlines are digging in and refusing to accept cost-cutting measures to keep the airline viable, despite urgings from the top, including from Prime Minister Goh Chok Tong.

SIA's wage-cut proposals are unacceptable, Air Line Pilots Association Singapore (Alpa-S) spokesman Frank John said, as the result would be a cut of up to 50 per cent in pilots' monthly incomes.

'Alpa-S has been singled out for mention although no other SIA union, as far as we know to date, has agreed to wage reductions, except for cabin crew taking compulsory no-pay leave,' he said.

The statement came a day after Mr Goh joined other government leaders and appealed to pilots to be flexible, saying the carrier's losses could mount to $1 billion this year.

Alpa-S represents 1,600 Singapore-based pilots. They are refusing to take 10 to 12 days of compulsory no-pay leave every two months and want SIA to first release 120 foreign pilots based overseas.

Management has also proposed wage cuts of 22.5 per cent for captains and 15 per cent for first officers. But pilots say this, plus the loss of flying hours, mean a loss of up to half their income.

Capt John said Monday's meeting with management to try and resolve the issue has been postponed to Tuesday.

SIA spokesman Rick Clements said the airline was still talking with unions and remained committed 'to taking whatever steps are necessary to get through this critical period with as few job losses as possible'.

Mr Goh said the Government would not intervene if negotiations stalled. But he urged the pilots to make personal sacrifices, saying the best way to protect their jobs is to ensure SIA continues to be a quality airline.

Labour chief Lim Boon Heng yesterday also urged Alpa-S to work with SIA to try and save jobs.

Speaking to reporters at a function in Jurong West, he also addressed concerns from the SIA Staff Union, Air-Transport Executive Staff Union, and SIA Engineering Company Engineers and Executives Union - whose members face a proposed 15-per-cent pay cut.

Many leaders and members of these unions want cuts restored when the economy rebounds, and suggested alternative cost-saving measures, such as axing foreign contract staff.

Mr Lim said SIA management ought to assure unions that there will be a fair payout when business improves.

But if SIA has to cut its workforce, it must retain the best performers irrespective of nationality, he said.

He warned that the longer it takes to find a solution, 'the higher the risks of the company getting into more severe problems requiring even more severe measures'.

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[Snowballs]

Wednesday morning

SIA, pilots' crisis talk ends in deadlock

SINGAPORE -- Crisis talks between Singapore Airlines management and its pilots' union over wage cuts to help the carrier weather the impact of Sars ended in deadlock on Tuesday.

'There was no resolution,' said Captain Frank John, spokesman of the Air Line Pilots Association Singapore.

He said management told the pilots that the airline was in a 'very serious situation and they requested us to seriously consider the wage cuts that they have proposed'.

Management also said they would 'moderate' its proposals for compulsory unpaid leave of 10-12 days every two months if the union accepted the wage cuts, he said.

SIA is proposing a 22.5-per-cent wage reduction for pilots and 15 per cent for first officers as a measure to reduce costs and allow the airline to survive the impact of the severe acute respiratory syndrome epidemic.

The union said pilots stand to lose 40-50 per cent of their monthly wages from the salary cuts and unpaid leaves.

Capt John said another round of talks was tentatively scheduled for next Tuesday.

He said the pilots reiterated their position that management should first axe foreign-based pilots employed by a 100 per cent SIA-owned company called SIA Mauritius before they agree to discuss wage cuts.

SIA has cut a third of its total passenger capacity after passenger volumes dwindled as travellers avoided Singapore and East Asia for fear of contracting the pneumonia-like virus. -- AFP