Stephen Forshaw said the unpaid leave periods would be for up to 30 months and are meant to deal with an expected surplus of pilots next year and beyond, while the company sidelines aircraft in the face of falling demand.

'The outlook for the freight industry is weak. Around the world, shipping companies are parking vessels and all-cargo airlines are being severely affected,' he said in a statement.

'Going forward, SIA Cargo needs to do all it can to contain costs. In doing so, the company will work cooperatively with its staff and unions to deal with the issues that arise, with a focus on steps that can be taken to avoid retrenchments, which will only be considered as a matter of last resort.'

SIA said it has 300 cargo pilots and 2,200 pilots for its passenger fleet.

There are no discussions for unpaid leave with passenger pilots, according to Mr Forshaw.

'However, we will respond to the changing demand climate quickly, and if this means we identify surplus staff, we will work cooperatively with our staff and unions to manage the issues,' he added.

SIA filled 60.3 per cent of available cargo space in November, down from 64.5 per cent in the same month last year, according to the latest available data.

Aviation industry group the International Air Transport Association (IATA) said on Tuesday that global freight fell 13.5 per cent in November from the year before, its biggest decline since 2001 in the aftermath of the September 11 attacks on the United States.

Freight traffic shrank a sharper 16.9 percent for airlines in the Asia-Pacific, which account for almost half of all air cargo, IATA said.

'As freight accounts for a larger percentage of revenues for the Asia-Pacific carriers, fourth-quarter profits for the region's carriers will be disproportionately (and negatively) impacted by the downturn in the global air freight market,' IATA added.

The association's director general and president, Giovanni Bisignani, said the sharp drop in international air cargo was 'shocking'.

'As air cargo handles 35 per cent of the value of goods traded internationally, it clearly shows the rapid fall in global trade and the broadening impact of the economic slowdown,' he said.

'The industry is now shrinking by all measures.'

SIA said in November that net profit for the fiscal second quarter ending September fell 36.2 per cent from the previous year to $324 million.

SIA shares finished eight cents lower at $11.26 on Wednesday, the last trading day of 2008. This compared with their closing price of $17.20 on the first trading day of 2008. -- AFP