Coronavirus: Weathering the storm

$750m aid package to keep critical aviation sector going

As part of the supplementary budget, companies in the aviation sector can tap an enhanced wage subsidy programme up to the end of this year. The sector will also get a $350 million enhanced aviation support package - more than three times the $112 mi
As part of the supplementary budget, companies in the aviation sector can tap an enhanced wage subsidy programme up to the end of this year. The sector will also get a $350 million enhanced aviation support package - more than three times the $112 million announced earlier - to help it through the "single biggest shock" the global aviation sector has ever experienced, Deputy Prime Minister Heng Swee Keat said.ST PHOTO: GAVIN FOO

Minimum air connectivity to be retained so that Singaporeans can return, supply lines stay open

Singapore will retain a minimum level of air connectivity even as airlines continue to ground flights amid the Covid-19 pandemic so that Singaporeans can return home and supply lines for essential goods stay open.

It is also critical to keep the aviation sector going so that the economy can pick up again when the time comes, said Deputy Prime Minister Heng Swee Keat in Parliament yesterday, when he unveiled a $750 million aid package for the industry.

He said: "Our aviation sector has significant linkages to the rest of our economy. If it collapses in a crisis, it will be very hard for the aviation industries to rebuild after the crisis is over, and the recovery of the rest of the economy will be impeded.

"We must therefore ensure that this temporary shock to our air hub does not become a permanent one."

The aviation and tourism sectors are the most badly hit in the current crisis.

As part of the supplementary budget, companies in the aviation sector can tap an enhanced wage subsidy programme up to the end of this year.

Under the programme, the Government will pay the companies 75 per cent of the first $4,600 of a local employee's monthly pay.

They, however, will receive the money in three tranches - in May, July and October.

This will cost the Government more than $400 million.

The sector will also get a $350 million enhanced aviation support package - more than three times the $112 million announced earlier - to help it through the "single biggest shock" the global aviation sector has ever experienced, Mr Heng said.

This will fund measures to reduce costs for airlines, ground handlers and cargo agents.

 
 

Airlines will get substantial cost savings on various fronts.

From next month to the end of October, they will get a 10 per cent landing charge rebate for all scheduled passenger flights landing in Singapore and 50 per cent rebate on rent paid for airlines' lounges and offices in Changi Airport's terminal buildings.

Also, the duration of the free parking of planes at Changi Airport will be extended. The previous Stabilisation and Support Package had set it to end in July. Now, it will go on till the end of October.

Ground handlers will get rebates on rental paid for their lounges and offices in Changi Airport's terminal buildings. Meanwhile, the cargo sector will get additional rebates on landing charges and rent.

The Civil Aviation Authority of Singapore (CAAS) will also allow Singapore carriers and the airport operator to partially or fully defer payment of certain fees to CAAS between April this year and March next year. The deferred fees come up to about $140 million.

Mr Heng said the profound impact of the Covid-19 outbreak on the economy will be felt for years to come.

"State support for the private sector where there are critical national interests at stake is not unprecedented," he added, citing previous examples in Europe and the United States. "We will support our aviation sector to ride out the Covid-19 pandemic."

Mr Heng also praised aviation companies such as SIA, Jetstar Asia and Sats for letting their interested workers help in public services that need more manpower now.

 
 

Budget carrier Jetstar Asia's chief executive Bara Pasupathi said more than one-third of its crew have taken up roles in the Singapore Food Agency, National Environment Agency and Raffles Medical Group.

The roles will let them support themselves while contributing to Singapore's efforts to contain the virus while flights are suspended by the company, he added.

Read Mr Heng's full speech here.

 
A version of this article appeared in the print edition of The Straits Times on March 27, 2020, with the headline '$750m aid package to keep critical aviation sector going'. Print Edition | Subscribe