Published August 14, 2008

SIA, pilots buckle down to head off arbitration

Industry watches as several sticking points stand in way

By VEN SREENIVASAN
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(SINGAPORE) It is something which has become somewhat predictable at Singapore Airlines in recent years. And we are not talking about the world-class quality standards at the airline.

We are referring to another round of bickering between the company and its pilots, which could end up - again - in the arbitration courts.

The pilots' union Alpa-S (Airline Pilots Association-Singapore) and SIA have been in negotiations all year since the last Collective Agreement expired in September last year.

Both sides seemed tight- lipped when contacted by BT but SIA's spokesman Stephen Forshaw said the company was 'proceeding with negotiations towards a certified agreement' with its pilots.

'There are some complex issues involved, but we will proceed to discuss those constructively with the union,' he explained. 'Both parties are committed to using the proper industrial framework and processes governed by law to negotiate the agreement.'

Meanwhile, sources tell BT that the Ministry of Manpower stepped in to assist the two sides to find common ground earlier this year after months of face-to-face direct negotiations led nowhere.

Direct negotiations have re-started, but about half a dozen sticking points continue to stand in the way of a new agreement.



These, BT understands, include issues such as remuneration adjustments for multi-fleet flying (pilots who fly different plane-types), compensation for first officers upgraded to cruise pilots (they are licensed to take command of the planes at cruising altitude), and some productivity targets.

But both sides seem also to have reached agreement on several key issues, including the building in of some elements of the variable components of wages into the fixed remuneration packages.

These variable components were designed by the airline after the industry was hit by the severe acute respiratory syndrome (Sars) crisis in June 2003. So severe was the impact of the pandemic that it sent SIA into the red in the first quarter of FY2003/04.

SIA and its pilots have a chequered history of bickering over wages and benefits, the most recent of which was last year, when the pilots and the company could not agree on compensation packages for different fleet types ahead of the arrival of the giant Airbus A380 planes.

But the most protracted battle was in 2004, after the crisis-hit airline cut salaries and laid off staff, including pilots. After months of standoffs, and the intervention of Minister Mentor Lee Kuan Yew, both sides agreed to a variable wage component which was benchmarked to the company's profitability and productivity goals.

Under that agreement, SIA restored most of the 11.5 to 16 per cent wage cuts initiated during the Sars period, but half was classified into a monthly variable component and the other half into an annual variable component. Essentially, up to 40 per cent of pilots' wages was made variable and dependent on profit and key productivity indicators.

But BT understands that after four years of strong profitability, the company wants to build a significant portion of this variable component into wages - which the pilots' union Alpa-S seems agreeable to. But the union is said to oppose some productivity targets which it claims would effectively tighten salary band-widths.

Meanwhile, most of SIA's other in-house unions are said to be close to or have already signed up to new CAs. These include pilots of its wholly-owned regional subsidiary SilkAir.

Industry insiders, meanwhile, are watching to see if the latest negotiations will lead the pilots and the company's management back to the Industrial Arbitration Court. Again.