SIA chief, senior staff take pay cut as air travel demand drops

Singapore Airlines chief executive Goh Choon Phong said in a note to staff that his management team will take the lead with a salary cut effective March 1, 2020. PHOTO: ST FILE

Singapore Airlines (SIA) is cutting pay for management staff as the global coronavirus outbreak continues to hit demand for air travel.

In a note to staff yesterday afternoon, chief executive Goh Choon Phong said: "My management team will take the lead."

From March 1, his pay will be cut by 15 per cent. The two executive vice-presidents will take a 12 per cent cut, and senior vice-presidents a 10 per cent cut, The Straits Times found out.

Other affected staff will take a 7 per cent or 5 per cent cut.

A voluntary no-pay leave scheme will be offered to staff, including cabin crew and pilots.

Mr Goh said: "Those who opt for this can be assured that the jobs will be there upon their return."

The new measures are part of broader cost-cutting initiatives, including deferring some capital expenditure, that the airline is rolling out to deal with a business downturn that has hit the global aviation industry.

The SIA group - comprising the premium parent airline, SilkAir and budget carrier Scoot - has temporarily suspended more than 3,000 return flights from this month to end-May following the outbreak in order to mitigate the impact of the significant drop in demand.

This accounts for 9.9 per cent of the group's scheduled flights until end-May.

Scoot is also looking at similar manpower cost reduction measures, a spokesman said.

Mr Goh said in his note: "We will continue to be proactive in implementing measures to meet the evolving challenges. Tough decisions will be needed along the way. Management will take the lead, and all of us must be prepared to make sacrifices. Our priority is to save jobs."

Earlier in the week, SIA had updated staff on the significant impact of the Covid-19 outbreak on the SIA Group and the need to be nimble and flexible in addressing the rapid decline in air travel.

Mr Goh said: "Since my note, Covid-19 has spread faster outside China, with a large number of cases reported in South Korea, Iran and Italy. There are growing concerns across other parts of the world, including our major markets in Europe and the United States."

Changi Airport recently reported that passenger movements fell by over 25 per cent during the first two weeks of this month, while traffic between Singapore and China dropped by more than 85 per cent year on year.

The International Air Transport Association (Iata), which represents global carriers, has warned that airlines in the Asia-Pacific could suffer a potential 13 per cent full-year loss in passenger demand as a result of the Covid-19 outbreak.

Such a scenario would result in a US$27.8 billion (S$38.8 billion) revenue loss for Asian airlines.

Iata's director-general and chief executive Alexandre de Juniac said in a recent note: "Airlines are making difficult decisions to cut capacity and, in some cases, routes. Lower fuel costs will help offset some of the lost revenue, but this will be a very tough year for airlines."

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A version of this article appeared in the print edition of The Straits Times on February 29, 2020, with the headline SIA chief, senior staff take pay cut as air travel demand drops. Subscribe