Retrenchments commence at SIA; airline and pilots union still in talks

Singapore

SINGAPORE Airlines (SIA) and the pilots union remain in talks over lay-offs as the parent airline began its retrenchment exercise on Monday.

Retrenchments have started for SIA and SilkAir cabin crew - a process expected to take place over the course of this week - while 50-60 pilots on employment passes were also understood to have been let go. Nearly 1,000 cabin crew from the two airlines will be affected in all.

Meanwhile, the flag carrier is still in talks with the Air Line Pilots Association - Singapore (ALPA-S), The Business Times understands. According to sources, the talks revolve around the number of retrenchments.

In response to queries from BT, a spokesperson for SIA said: "Singapore Airlines is in a dialogue with ALPA-S and is committed to reaching an agreement with them as soon as possible." The spokesperson added that details of its discussions with ALPA-S remain confidential.

Agreements have been reached with the other unions including the Singapore Airlines Staff Union (SIASU), which counts over 9,000 SIA and SilkAir cabin crew among its members.

All affected staff will receive salary in lieu of their notice period, as well as any bonuses that are due. Staff who have been with the airline group for over two years will also receive one month's salary for every year of service capped at 25 months, while those with less than two years of service will stay on with the airline until mid-December.

It is understood that transport was arranged for affected staff, who were informed by email of the briefing which took place at SIA Training Centre. Terms of the release package were explained individually to staff, while employees who are overseas are being informed personally either through a phone call or teleconferencing.

"We have put together a portal listing available job vacancies in external companies, and our unions are also providing support where possible," said SIA in a statement.

Last week, Singapore's flag carrier announced that it will cull 4,300 positions - or about 20 per cent of its workforce - as a slow recovery in travel demand prompts carriers around the world to rightsize operations. Of this, about 2,400 staff both in Singapore and abroad will likely face lay-offs, while the remaining 1,900 roles will be eradicated through natural attrition, voluntary departure schemes and a recruitment freeze. It is understood that the number of Singaporeans affected by lay-offs are a single-digit percentage of the 2,400 roles.

Separately, in a note to pilots seen by BT, ALPA-S touched on its concerns regarding accepting deeper salary cuts; this was in reference to a media article which suggested drastic pay cuts could help most Singaporean pilots under the age of 62 retain their jobs. They highlighted that SIA and SilkAir pilots have taken a "significant wage reduction" between April and July through compulsory no pay leave (CNPL) and a loss in productivity allowance. The productivity allowance - a component linked to flight hours - accounts for about 40 per cent of the overall salary package for pilots.

Starting August, SIA and the pilots then agreed upon a 10 per cent cut in basic monthly salary and a downward reduction in the number of CNPL days monthly. Together with the reduced productivity allowance, this works out to overall salary cuts of up to 10 per cent for Second Officers, up to 48 per cent for First Officers, up to 54 per cent for Captains and up to 68 per cent for those on re-employment contracts. The percentage may vary depending on the number of hours flown per month.

To avoid a potential double whammy where pilots accept deeper pay cuts but end up facing further lay-offs down the line, "some form of guarantees" have to be provided, the union added in the note. ALPA-S, which represents nearly 2,400 active pilots, did not respond by press time.

The pilots union and SIA haven't always seen eye to eye, such as when relations soured back in 2003 in the wake of SARS and the accompanying retrenchments. This led to an impasse in 2004 as they sought to ink a collective agreement, which they eventually hammered out after protracted negotiations.

Meanwhile, SIA's budget arm Scoot - which is represented by the Scoot Staff Union - had carried out its own retrenchment exercise on Friday. Among those retrenched were slightly over 100 Scoot pilots, BT understands. When contacted by BT, a Scoot spokesperson said the airline was unable to share information on the number of retrenchments.

While the budget carrier previously implemented measures such as a recruitment freeze and a voluntary no-pay leave scheme for staff to contain costs, it is operating at just 4 per cent of its original capacity, rendering those measures insufficient.

At 8 per cent, SIA is similarly operating at a mere fraction of its original capacity, while the International Air Transport Association only expects travel to rebound to pre-Covid levels by 2024. As such, the airline will need to rationalise its network and operate a smaller fleet of aircraft.

At a press conference on Monday, Minister for Trade and Industry Chan Chun Sing said that the Restaurant Association of Singapore is working with its members to offer over 1,000 positions to those who have been made redundant.

Companies which have already offered to hire retrenched SIA staff include education group EtonHouse - which is offering over 100 places - seafood chain Jumbo and Commonwealth Capital. This works out to over 200 roles in total.

Shares in SIA closed five cents lower at S$3.51 on Monday.