SINGAPORE - The basic salaries of Singapore Airlines (SIA) pilots will be gradually restored to pre-Covid-19 levels by January next year as demand for air travel returns with the reopening of borders around the world.

An SIA spokesman confirmed on Tuesday (May 3) that the airline has signed a new agreement with its pilots' union, the Air Line Pilots Association - Singapore (Alpa-S).

Under this agreement, which took effect on April 1, basic salaries of SIA pilots will be progressively restored over a nine-month period ending on Dec 31.

By then, almost three years would have passed since the national carrier had to implement pay cuts and other staff measures to reduce expenditure during the early stages of the pandemic in 2020.

For senior management, however, salary reductions of between 15 per cent and 25 per cent remain in effect. Similarly, SIA board members will continue to get 30 per cent cut on their fees.

According to an internal circular issued by Captain C. E. Quay, SIA's senior vice-president of flight operations, and Alpa-S president Subramaniam Ramanathan, captains on re-employment contracts have had their pay cut reduced to 26.3 per cent.

Before the new agreement, 50 per cent of their pre-pandemic basic pay was docked.

This will go down to 17.5 per cent from July, and then to 8.8 per cent from October, before basic salaries are fully restored from next January.

For other captains and first officers, the reduction in pay cuts will depend on their salary band. For instance, since April, the pay cut for captains was reduced from between 15 per cent and 18.5 per cent to between 7.5 per cent and 9.8 per cent.

This will go down to between 5 per cent and 6.5 per cent from July, and then down to between 2.5 per cent and 3.3 per cent from October.

The pay cut for first officers was reduced from between 5 per cent and 8.5 per cent to between 2.3 per cent and 4.5 per cent, and will drop every three months until next January.

According to the circular, these pay cuts will also be reduced based on the amount of flight hours pilots clock each month.

For instance, if flying hours increase to more than 65 hours a month by November, the pay cuts will cease with effect from December instead of next January.

Crippled by the Covid-19 outbreak in 2020, SIA had reached agreements with its unions on varying days of compulsory no-pay leave every month for its pilots, starting from April that year.

After some disagreement between Alpa-S and SIA over a proposal to convert compulsory no-pay leave to full pay cuts later that year, an agreement was reached in August where pilots' salaries were docked by between 13 per cent and 50 per cent.

This included cutting the monthly variable component (MVC) that makes up about 10 per cent of a pilot's basic salary.

The August 2020 agreement was then superseded by another deal signed the following month.

This resulted in SIA pilots taking pay cuts of up to 50 per cent so that more of them could stay employed.

This was on top of the 10 per cent cut in the MVC, which was restored in August last year.

This agreement, which lasted until March this year, helped to save about 400 jobs, SIA Group, which operates SIA and low-cost carrier Scoot, previously said.

The group currently employs about 2,700 pilots and more than 7,000 cabin crew, Chinese-language daily Lianhe Zaobao reported. As at March this year, about 95 per cent of pilots and 90 per cent of its cabin crew have resumed flying.

Two SIA pilots who had mixed reactions to the new agreement spoke to The Straits Times on the condition of anonymity.

One, who is on a re-employment contract, said it was hard to argue against having more money in the bank. 

“When I saw the circular, I thought it was some good news at least,” he said.

Another pilot, however, said the general feeling is that the restoration is late and insufficient, especially for those who have suffered financially over the past two years. 

“Some have had to refinance their housing loans because they never expected the pay cuts to be so hefty,” he told ST.

On the bright side, flying is picking up, and this means higher earnings, the pilot said. 

About 40 per cent of an SIA pilot’s total monthly salary typically comes from a productivity allowance that is linked to flight hours. It comes on top of their basic wage.

In March, SIA Group's passenger capacity reached 51 per cent of pre-Covid-19 levels.

This is expected to increase to about 61 per cent by the end of this month.

The gradual recovery of the aviation industry has also allowed Changi Airport Group (CAG) to restore the base salaries of its senior management in April.

They previously had their pay reduced by up to 30 per cent after base pay cuts were introduced for all CAG staff in April 2020.

In September last year, the salary cuts were removed for all CAG employees - up to those in middle management.

Said a CAG spokesman: "The wage restoration is a recognition of the resilience demonstrated by CAG's employees, who have continued to support the airport's business and operations throughout the pandemic."

She added that CAG has also been hiring employees to fill critical positions even during the pandemic, and that it will continue to refine its recruitment plans to ensure that the company has sufficient manpower to support the airport's recovery.

Transport Minister S. Iswaran has said that Singapore aims to restore half of its pre-Covid-19 passenger volume by the end of this year.

Before the pandemic struck in 2020, 68.3 million travellers passed through Changi Airport.

Correction note: This story has been edited for accuracy.