Senior management first to go on scheme, others to follow
By NISHA RAMCHANDANI
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(SINGAPORE) Singapore Airlines (SIA) is gearing up for the effects of capacity cuts in its current financial year.
It is implementing, with immediate effect, a shorter work month for senior management, a scheme that will be extended to other managers as well as ground staff and cabin crew from May 1.
In addition, management will take a wage freeze.
At this point, in-principle agreements have been signed with two of the three in-house unions. These are the Singapore Airlines Staff Union representing ground staff and cabin crew, and the Airline Executive Staff Union which represents administrative staff. Discussions are still going on with the third union, the Airline Pilots Association.
Come May 1, the scheme will be rolled out to all ground staff and cabin crew, although 'the implementation date is predicated on the scheme applying to all employees across the company', the airline said in a statement yesterday.
Managers and ground staff will have to clear one day of leave every month, either as annual leave or no-pay leave. However, pilots and cabin crew will be required to take no-pay leave due to over-staffing.
SIA has a headcount of around 14,500, which includes 7,000 cabin crew, some 3,500 ground staff and about 2,000 pilots.
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On top of the shorter working month scheme, SIA has approved no-pay leave applications from 1,405 staff - a response to the voluntary no-pay leave initiative offered to staff for periods ranging between one week and two years. Most of the applicants are cabin crew, opting for leave periods of under a month.
'The take-up rate will certainly help meet the projected reduction in staffing levels required because of capacity reductions during this financial year,' said spokesman Stephen Forshaw.
And while these measures aim to tackle the problems at hand, they may not nearly be enough. 'The airline cannot rule out further measures to contain costs if the downturn worsens,' SIA said.
This could just be a matter of time, given that deteriorating global economic conditions forced the International Air Transport Association (Iata) to recently hike its loss forecast for the global air transport industry to US$4.7 billion in 2009, a sharp rise from the US$2.5 billion loss forecast made in December last year.
Faced with slumping travel demand, SIA announced previously that it is reducing capacity by 11 per cent and grounding 17 of its over 100 aircraft for the financial year ending March 31, 2010.
This came on the back of other capacity changes announced earlier, including the withdrawal of service to Amritsar and Vancouver, a lower flight frequency to India, as well as a cutback on non-stop flights between Singapore and the US.
For February, SIA saw a load factor of just 69.7 per cent - down 7.1 percentage points from 76.8 per cent a year earlier - in spite of a capacity reduction of 8.5 per cent. The number of passengers carried dropped 20.2 per cent from a year ago to 1.18 million.
Meanwhile, SIA will continue to push for the right to fly the trans-Pacific Sydney-Los Angeles route, despite being repeatedly shut out by the Australian federal government.
V Australia - the long-haul arm of Australian carrier Virgin Blue - and Delta Airlines are set to join Qantas and United Airlines on the protected route.
SIA is prepared to be patient in its long-running battle, CEO Chew Choon Seng was reported as saying to Australian media earlier this week.
Mr Chew, who was in Brisbane to receive SIA's revamped A330 service, also indicated the Australian travel market was proving to be more resilient than other regions, the report said.
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