SINGAPORE - An $870 million support package for the hard-hit aviation sector will increase wage subsidies to 50 per cent for local workers for another six months, the Ministry of Transport (MOT) said on Wednesday (Feb 17).

The Jobs Support Scheme - which would be extended, as announced by Deputy Prime Minister Heng Swee Keat in his Budget speech on Tuesday - provides firms in the sector with wage support of 30 per cent from April to June, and 10 per cent from July to September.

The Aviation Workforce Retention Grant, which will cost $330 million, will enhance that to 50 per cent of wages paid to Singaporeans and permanent residents from April to September, said MOT.

This means that eligible firms will receive an additional 20 per cent of wages paid to each local employee from April to June, and an additional 40 per cent from July to September.

The wage subsidy is subject to a cap of up to $4,600 of gross monthly wages.

Minister for Transport Ong Ye Kung noted that aviation has been one of the hardest-hit sectors during the pandemic, "if not the hardest hit", as Changi Airport and its stakeholders lost 97.5 per cent of its customers.

As at end-January this year, total passenger movements in Changi were only about 2 per cent of pre-Covid-19 levels.

"Yet for a city-state like Singapore, the air hub is essential to connect us with the rest of the world and continues to be our lifeblood," said Mr Ong. "This support will help Changi tide through the crisis, while we explore ways to reopen borders safely."

In his Budget speech, Mr Heng emphasised the need to position the aviation sector for recovery as part of efforts to deepen Singapore's position as a global-Asia node.

The remaining $540 million under the OneAviation Support Package will go to cost relief, said MOT.

This includes extending existing rebates on fees and charges at Changi and Seletar airports for another year. The rebate on fees payable by pilots, air traffic controllers and aircraft maintenance engineers will also be extended for another year.

"The package will enable aviation companies to preserve core capabilities and tide over the crisis, and preserve Singapore's position as an aviation hub post-Covid-19," said MOT.

The funding for the sector comes under the $11 billion Covid-19 Resilience Package announced in the Budget speech.

MOT said that many aviation companies around the world had reduced their headcounts over the past year, pointing out that those in Singapore did likewise in "a very judicious manner, mostly affecting foreign manpower".

"We must avoid further reductions to the aviation workforce so that companies will not lose their core local capabilities, which have taken many years to build up. If the sector weakens its capabilities, this will hamper its ability to recover," added the ministry.

Companies whose activities are based principally at Changi Airport will receive the Aviation Workforce Retention Grant. These companies in the aviation sector are already receiving Tier 1 Jobs Support Scheme support.

Companies do not need to apply for the grant, and the Civil Aviation Authority of Singapore will notify eligible companies of the amount of support they will receive.

They will receive two payouts under the grant. Support for wages paid from April to June will be given in September, and in December for wages paid from July to September.

In addition to wage support, companies in the air transport sector will continue to receive training support, said MOT.

This will be through the Enhanced Training Support Programme, which has been extended to December.

Singapore-based airlines will also receive support to convert some of their existing pilots to operate other aircraft types, to provide an adequate pool of trained pilots in the eventual recovery, MOT added.

Chief executive of Changi Airport Group Lee Seow Hiang said the aviation support package not only would provide greater financial relief but also help to strengthen the capabilities of its workforce and pioneer new ways to deliver safe leisure and business travel experiences.

He said air travel demand was unlikely to return to pre-Covid-19 levels in the near term despite the promise of Covid-19 vaccines. Many countries around the world continue to maintain tight border controls, he noted.