SIA, Alpa-S agree on pilot pay cut, change to compulsory no pay leave scheme

Singapore

SINGAPORE Airlines (SIA) and the Air Line Pilots Association - Singapore (Alpa-S) have inked a memorandum of agreement (MOA) which will see pilots taking a 10 per cent cut in their basic salary and an adjustment to their compulsory no pay leave (CNPL) scheme.

Under the agreement signed last week, all pilots will receive a 10 per cent monthly variable component reduction in basic salary from Aug 1 to Oct 31, The Business Times understands. Alpa-S represents nearly 2,400 pilots across SIA and SilkAir.

In addition, downward adjustments are also being made to the number of days of CNPL that pilots have to take each month, with Captains having to take four days of CNPL and First Officers, one day of CNPL. Second Officers do not have to take CNPL.

Pilots under a re-employment contract, aged 62 and above, are required to take 11 days of CNPL per month.

Pilots were first put on a CNPL scheme back in April, with Captains taking seven days of CNPL per month, while First Officers and Second Officers took five days and four days per month respectively. Those on re-employment contracts were placed on furlough.

Alpa-S had said at the end of March that those measures - together with the reduction in flying - resulted in an average of up to 55 per cent salary cuts for Captains, up to 50 per cent cuts for First Officers and up to 15 per cent cuts for Second Officers.

The figures were in reference to total monthly salary package that includes both a basic salary and a variable component which is linked to flying.

BT understands that the latest round of salary cuts (including the variable component) are about on par with that of April's.

In a circular on the MOA issued to staff that was seen by The Business Times, SIA said: "The company continues to review our costs and will take all required measures to preserve cash to sustain our business."

When contacted by BT on Monday, an SIA spokesperson confirmed that it had signed the agreement with Alpa-S.

A spokesperson for Alpa-S said that the union had signed a new MOA with SIA last week, with some changes to the offer received two weeks prior, but was unable to share details of the agreement.

"As the aviation industry faces more challenges in this unprecedented crisis, Alpa-S continues to work with SIA, the Ministry of Manpower and its members to ensure that the best and fairest solutions are explored and put in place to overcome these challenges," the spokesperson said.

All this comes after Alpa-S had taken issue with SIA's plan to convert CNPL to pay cuts, a move first announced to staff in end-July.

In a newsletter to its members on July 30, Alpa-S highlighted that reducing the number of CNPL days would introduce more available man-days into the system, resulting in an increase of surplus crew numbers.

The pilots union had also not been in favour of the special early-retirement scheme, citing a disappointing quantum.

SIA has started offering a voluntary early-retirement scheme for all ground staff and pilots, which comes with monetary pay outs and retirement travel benefits. Employees aged 50 and above, with at least 15 years of service, are eligible.

Singapore Airlines Staff Union (SIASU) - whose members include cabin crew, ground staff and technicians - and the Air-Transport Executive Staff Union (AESU) had already previously agreed to SIA's latest cost cutting measures.

Starting in March, a voluntary no pay leave scheme was extended to SIA's 9,000 strong cabin crew, who were already suffering from wage cuts owing to the loss of flying hours. SIASU represents nearly 11,000 members while AESU represents 1,800 members.

As it stands, all SIA staff below the level of manager have taken a 10 per cent cut on their basic salary, while those in manager roles and above have taken salary cuts of between 12 and 35 per cent, with SIA chief Goh Choon Phong facing the largest cut at 35 per cent.

SIA, which reported a Q1 net loss of S$1.12 billion, is operating just 7 per cent of its original capacity this month as the pandemic thrusts the aviation industry into its biggest crisis to date.

The recovery in the airline industry has also taken longer than expected, as fresh waves of Covid-19 cases have prompted countries to keep travel curbs in place.

While SIA and SilkAir's combined capacity is poised to increase to 8 per cent in October, the airline group said in its latest earnings update that it expects to operate just less than 50 per cent of its capacity by the end of the financial year in March 2021.

With the International Air Transport Association projecting that air travel demand may not return to pre-Covid levels until 2024, the SIA group could have surplus aircraft on its hands in the near to medium term - which in turn could translate to surplus pilots and crew.

The company is said to be looking at a broad range of measures as to how it can deal with the surplus.

Since March, over 6,000 of the 27,000 employees across the SIA Group - such as ground staff, pilots and cabin crew - have taken varying days of no-pay leave.

Meanwhile, more than 1,700 SIA Group employees have taken on short term volunteer positions and temporary job placements outside the company, such as at hospitals or in ambassador roles.

With successive losses to come in future financial quarters, the airline may eventually be forced to take more drastic steps, such as scrapping the A380 planes, deferring aircraft deliveries and possibly retrenchments, founder of aviation consultancy Endau Analytics, Shukor Yusof, had told BT previously.

Shares in SIA closed at S$3.49 last Friday, down four cents.