Singapore Airlines (SIA) will be taking more drastic measures to rein in costs, including varying levels of pay cuts for all management and rank-and-file staff, as well as early retirement for ground staff and pilots.
The full quantum of the monthly variable component of salaries will be cut from tomorrow, in accordance with the group's collective agreements with its unions after the first-quarter operating loss for SIA and its regional arm SilkAir.
This amounts to 10 per cent of the basic salary for all staff below the rank of manager, said SIA chief executive Goh Choon Phong in a notice to staff this week.
All staff who are at the manager level and above will also see deeper cuts to their basic salary from tomorrow.
Managers and senior managers will have their salaries cut by 12 per cent, up from 10 per cent earlier.
Vice-presidents and divisional vice-presidents will see a 15 per cent cut, up from 12 per cent.
Senior vice-presidents will take a 25 per cent cut, up from 20 per cent.
Executive vice-presidents will see a 30 per cent reduction, up from 25 per cent.
This comes as the recovery trajectory in international air travel is weaker than initially expected, said Mr Goh, whose salary will be slashed by 35 per cent, up from 30 per cent.
"The number of infections continues to rise globally, with some regions battling a second or third wave. Borders are likely to open only very slowly in the absence of a vaccine or an effective treatment."
The company will offer a Covid-19 special early retirement scheme for ground staff and pilots next week.
This will be available to those aged 50 and above, up to the level of divisional vice-president.
They must have at least 15 years of service with the group.
Applications for early retirement will be approved based on organisational and operational requirements.
More details will be released by the human resources division.
Mr Goh told staff to brace themselves for additional measures, given the slower growth trajectory and depressed market conditions.
"We will be engaging our staff unions on this and will announce the measures when they have been firmed up," he added.
"Our immediate priority is to do everything we can to survive this crisis and be ready for the long trudge ahead of us."
The SIA group announced a net loss of $1.12 billion for the first quarter ended June 30, as demand plummeted amid travel restrictions caused by the Covid-19 pandemic.
In his memo to staff seen by The Straits Times, Mr Goh shared that industry experts now forecast that it will take about two to four years for passenger traffic numbers to return to pre-pandemic levels.
Amid ongoing border controls and travel restrictions, and without a domestic market to fall back on, passenger capacity during the April-June quarter is about 5 per cent of the level before Covid-19.
"The load factor for that skeletal network was at 10.2 per cent for the quarter, down from 83.4 per cent," said Mr Goh.
"We carried a total of only 38,000 customers during those three months - a whopping 99.6 per cent drop from almost 9.4 million a year before."
Mr Goh added that the group needs to be prepared for "a long and hard Covid-19-induced winter".
SIA shares fell to their lowest in over 21 years yesterday.
It tumbled by as much as 5.1 per cent to $3.35, the lowest intra-day price since September 1998, before closing 3.12 per cent lower at $3.42.