As the battle for the skies take its toll on once high flying service providers, one elitist airline-Singapore Airlines (SIA) has got its pilots to agree to take no-pay leave as well as a pay cut from July 1. This is the latest to erupt in a string of cost-cutting measures as global airlines take continuous revenue battering.
SIA also said its management staff and board of directors have agreed to a pay cut of at least 10 per cent which will help SIA to save about S$21 million (RM51 million) in costs in 2009.
After months of tough negotiations, an agreement between SIA and the Air Line Pilots Association-Singapore (Alpa-S) was finally hammered out and signed on June 18.
Under this agreement, the pilots – more than 1,800 of them – will take one day of no-pay leave each month and a cut of 65 per cent of one day’s pay a month, pro-rated from their monthly basic salary.
SIA said that the terms of the agreement with Alpa-S were determined by the situation where there arose surplus pilot resources because of reduced flight schedules,as SIA cuts back flight frequencies following the sharp fall in demand for air travel.
SIA passenger numbers last month fell by almost 24 per cent from the same period last year to about 1.2 million, outpacing an almost 14 per cent cut in capacity.The airline’s passenger load factor also fell to about 67 per cent, down almost eight percentage points year-on-year.
From next month, all SIA management staff will take a pay cut of at least 10 per cent, while its chief executive will have his pay chopped off by 20 per cent.
The board also volunteered a cut of 20 per cent in director fees.
Almost 2,000 employees have also signed up for SIA’s voluntary no-pay leave scheme where staff can apply for no-pay leave of up to two years.
SIA's salary cuts and related cost-cutting measures are akin to what Hong Kong’s biggest carrier Cathay Pacific and Australia’s largest carrier Qantas Airways have announced. In May 2009, Cathay announced that 90 per cent of its pilots had signed up for unpaid leave while Australia had earlier on in April cut 1,750 jobs.
So what about MAS and Air Asia? Are they doing so well to prevent such cost-cutting measures from happening back home?
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