SIA freezes hiring for ground staff, mulls other measures in response to outbreak

SINGAPORE Airlines (SIA) has introduced a hiring freeze and is contemplating other cost-cutting measures amid the novel coronavirus outbreak.

These measures could possibly include asking staff to go on voluntary no-pay leave, The Straits Times (ST) reported on Tuesday.

After three rounds of flight cuts including the latest on Monday, the flag carrier is facing an excess manpower situation of more than 500 cabin crew members and some 50 pilots, according to ST.

An SIA spokeman told The Business Times (BT) on Tuesday that the airline has implemented a "general recruitment freeze" for all ground positions, in response to the virus outbreak. Non-essential duty travel has also been suspended.

"We are closely monitoring the evolving situation and will be decisive in implementing any additional measures that may be needed. However, we will not do anything that compromises the SIA group's long-term competitiveness," the spokesman said.

In a staff memo seen by BT, Goh Choon Phong, SIA chief executive, said that the group - comprising SIA, regional carrier SilkAir and budget airline Scoot - has seen a rapid decline in its passenger traffic and load factors in all markets since news of the virus emerged in mid-January.

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The group has temporarily suspended more than 3,000 flights from February to end-May, accounting for 9.9 per cent of its scheduled capacity.

"Preventive measures to conserve cash and reduce costs have been taken. Selected capital expenditure has been deferred, and we have tightened on discretionary operating expenditure," Mr Goh said in the memo which was sent to staff on Tuesday.

The group has reached out to its suppliers and partners to discuss additional mitigating measures, he added.

"On the revenue side, our commercial teams are working closely with tourism agencies and travel partners all around the world to aggressively drive sales, and jointly promote air travel to and through Singapore," Mr Goh said.

SIA had announced on Facebook on Monday evening that it will suspend more flights in its global network in the months of February through May, in response to weak demand caused by the virus situation.

Meanwhile, for the first two weeks of February, total passenger movements at Changi Airport fell by more than 25 per cent year on year, while traffic between Singapore and China declined by more than 85 per cent, Changi Airport Group (CAG) said in a media statement on Tuesday afternoon.

This was due to the decline in air travel demand as a result of the Covid-19 outbreak, and the impact was amplified by the Chinese New Year travel peak which occurred in February 2019, CAG added.

As at Feb 14, 2020, there were about 40 weekly services to fewer than 10 cities in mainland China - a decrease of 90 per cent compared to around 400 weekly services linking Singapore to 36 Chinese destinations previously, CAG said.

Two weeks ago, SIA posted a 10.9 per cent rise in its Q3 net profit, but warned that the growing scale of the Covid-19 spread would pose "significant challenges" to the group as it looked to "tightly" manage costs ahead. The national carrier had said then that demand for services to mainland China has been "severely affected", with SIA and SilkAir drastically reducing frequencies on all mainland China routes in February and March 2020. Scoot also suspended all flights to mainland China until March 28, 2020.

As at 2.40pm on Tuesday, SIA shares were trading at S$8.49, up S$0.01 or 0.1 per cent.