Coronavirus: Aviation sector, which is critical to economic recovery, to get $750m aid package

The aviation and tourism sectors have been the most badly hit by the outbreak.
The aviation and tourism sectors have been the most badly hit by the outbreak.ST PHOTO: GAVIN FOO

SINGAPORE - 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 Finance Minister Heng Swee Keat in Parliament on Thursday (March 26), as he unveiled a $750 million aid packge 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 have been the most badly hit by the outbreak.

As part of the Supplementary Budget, companies in the aviation sector can tap on 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.

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

The package will fund measures to reduce costs for airlines, ground handlers and cargo agents so that they can continue to operate.

Airlines will get substantial cost savings on various fronts.

From April to end-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 rental paid for airlines' lounges and offices within Changi Airport's terminal buildings.

They will also get 100 per cent rebate on parking charges at Changi Airport from August to October - an extension of the rebate announced in the previous Stabilisation and Support Package.

 
 

Ground handlers will get rebates on rental paid for their lounges and offices within Changi Airport's terminal buildings. Meanwhile, the cargo sector will get additional rebates on landing charges and rent, on top of what was previously announced.

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 value of the deferred fees is about $140 million.

More details will be provided to companies by Changi Airport Group and the CAAS.

Mr Heng noted that 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 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 to help in public services that require more manpower during this period. 

In a statement, budget carrier Jetstar Asia’s chief executive Bara Pasupathi said more than one-third of its crew have taken up roles with the Singapore Food Agency, National Environment Agency and Raffles Medical Group. 

He said these roles would allow the airline’s crew to support themselves and also contribute to Singapore’s effort to combat the spread of the coronavirus amid the suspension of flights by the company.

The airline has grounded its entire fleet of 18 Airbus 320s until mid-April as the demand for air travel plummets.

The crew’s new role include being ambassadors at coffee shops and hawker centres, where they advise patrons on good habits like safe distancing.

Their contract is up to six months, after which they are expected to return to flying.