I. M. Esperto
25th May 2003, 22:34
http://straitstimes.asia1.com.sg/topstories/story/0,4386,190990,00.html?
SIA could lose $1b this year, warns PM
He says airline could go into 'intensive care unit' if pilots do not accept cost-cutting moves such as no-pay leave
By Lydia Lim
PRIME Minister Goh Chok Tong yesterday added the weight of his voice to urge Singapore Airlines (SIA) pilots to accept cost-cutting measures and warned that the carrier's losses could mount to $1 billion this year.
Wage cuts are needed to help the national carrier stay viable, he said, pointing to how passenger traffic has plunged since the start of the year.
Last month, SIA lost $204 million and it expects to make its first-ever quarterly loss.
Yesterday, Mr Goh said: 'SIA is in an emergency and if the management and the staff of SIA do not handle the situation well, SIA could well go into the intensive care unit.'
His comments to reporters after an event at Marine Parade Community Club come ahead of tomorrow's meeting between the pilots' union and the SIA management to discuss their differences over cost-cutting measures.
He was the third Cabinet minister in as many days to call on the pilots to settle these differences.
The pilots have refused to take 10 to 12 days of compulsory no-pay leave every two months unless SIA first releases 120 foreign pilots based overseas.
Mr Goh took the side of the airline's management yesterday when he made it clear that acceding to the pilots' request would send the wrong signal to foreigners, whom he said SIA needs as there are not enough Singaporean pilots and cabin crew to run its global operations.
If retrenchments are necessary, they should be based on merit, not nationality, he said. 'I hope the pilots can understand this. It is not in their interest to protect their jobs this way.
'The best way to protect their jobs will be to ensure Singapore Airlines remains a quality airline, having quality crew and quality pilots.'
Like Deputy Prime Minister Lee Hsien Loong and National Trades Union Congress chief Lim Boon Heng, who spoke on Friday, he pointed out that SIA's problems did not just start with the Sars outbreak.
Since the Sept 11 terrorist attacks on the United States, the airline industry has undergone massive restructuring to become more efficient and SIA has to do the same to survive the competition, he said.
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'Wages are an important indicator to foreign investors. If wages are sticky downwards - they go up but never come down - then they say this place is hopeless.'
- PM Goh, on the need to reduce wages and other business costs in order for Singapore to remain attractive to foreign investors
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British Airways, for example, has cut 17,000 jobs in the last two years and plans to slash its workforce by another 23 per cent this year.
To SIA's 1,600-strong pilots' union, Mr Goh had this message: It is during a time of crisis that a union shows its character.
'If the union now shows a selfish character and seeks to protect the jobs of its members, then I would be disappointed,' he said.
Mr Goh reminded the pilots that the Government has played a big role in building up SIA and creating jobs for them.
The negotiations for SIA's air traffic rights are done by the Government, he said. Its efforts in building up Changi Airport into a global air hub have also increased SIA's passenger traffic.
He called on the pilots to make personal sacrifices for SIA, which he called 'an icon of Singapore', but said that the Government would not intervene if negotiations reached a stalemate.
Turning his attention to the overall economy, Mr Goh focused on the importance of wage restructuring, a theme that is set to dominate the Government's agenda in the coming months.
He warned that if Singapore failed to reduce wages and other business costs during this economic downturn, foreign investors would in future give it a miss in favour of other cheaper places.
Costs in some countries, such as Malaysia, China and Hong Kong, have become lower relative to Singapore's because their currencies are pegged to the US dollar, which has depreciated, he noted.
'Wages are an important indicator to foreign investors,' he said.
'If wages are sticky downwards - they go up but never come down - then they say this place is hopeless.'
SIA could lose $1b this year, warns PM
He says airline could go into 'intensive care unit' if pilots do not accept cost-cutting moves such as no-pay leave
By Lydia Lim
PRIME Minister Goh Chok Tong yesterday added the weight of his voice to urge Singapore Airlines (SIA) pilots to accept cost-cutting measures and warned that the carrier's losses could mount to $1 billion this year.
Wage cuts are needed to help the national carrier stay viable, he said, pointing to how passenger traffic has plunged since the start of the year.
Last month, SIA lost $204 million and it expects to make its first-ever quarterly loss.
Yesterday, Mr Goh said: 'SIA is in an emergency and if the management and the staff of SIA do not handle the situation well, SIA could well go into the intensive care unit.'
His comments to reporters after an event at Marine Parade Community Club come ahead of tomorrow's meeting between the pilots' union and the SIA management to discuss their differences over cost-cutting measures.
He was the third Cabinet minister in as many days to call on the pilots to settle these differences.
The pilots have refused to take 10 to 12 days of compulsory no-pay leave every two months unless SIA first releases 120 foreign pilots based overseas.
Mr Goh took the side of the airline's management yesterday when he made it clear that acceding to the pilots' request would send the wrong signal to foreigners, whom he said SIA needs as there are not enough Singaporean pilots and cabin crew to run its global operations.
If retrenchments are necessary, they should be based on merit, not nationality, he said. 'I hope the pilots can understand this. It is not in their interest to protect their jobs this way.
'The best way to protect their jobs will be to ensure Singapore Airlines remains a quality airline, having quality crew and quality pilots.'
Like Deputy Prime Minister Lee Hsien Loong and National Trades Union Congress chief Lim Boon Heng, who spoke on Friday, he pointed out that SIA's problems did not just start with the Sars outbreak.
Since the Sept 11 terrorist attacks on the United States, the airline industry has undergone massive restructuring to become more efficient and SIA has to do the same to survive the competition, he said.
--------------------------------------------------------------------------------
'Wages are an important indicator to foreign investors. If wages are sticky downwards - they go up but never come down - then they say this place is hopeless.'
- PM Goh, on the need to reduce wages and other business costs in order for Singapore to remain attractive to foreign investors
--------------------------------------------------------------------------------
British Airways, for example, has cut 17,000 jobs in the last two years and plans to slash its workforce by another 23 per cent this year.
To SIA's 1,600-strong pilots' union, Mr Goh had this message: It is during a time of crisis that a union shows its character.
'If the union now shows a selfish character and seeks to protect the jobs of its members, then I would be disappointed,' he said.
Mr Goh reminded the pilots that the Government has played a big role in building up SIA and creating jobs for them.
The negotiations for SIA's air traffic rights are done by the Government, he said. Its efforts in building up Changi Airport into a global air hub have also increased SIA's passenger traffic.
He called on the pilots to make personal sacrifices for SIA, which he called 'an icon of Singapore', but said that the Government would not intervene if negotiations reached a stalemate.
Turning his attention to the overall economy, Mr Goh focused on the importance of wage restructuring, a theme that is set to dominate the Government's agenda in the coming months.
He warned that if Singapore failed to reduce wages and other business costs during this economic downturn, foreign investors would in future give it a miss in favour of other cheaper places.
Costs in some countries, such as Malaysia, China and Hong Kong, have become lower relative to Singapore's because their currencies are pegged to the US dollar, which has depreciated, he noted.
'Wages are an important indicator to foreign investors,' he said.
'If wages are sticky downwards - they go up but never come down - then they say this place is hopeless.'