COVID-19 SPECIAL

Much-needed relief for aviation sector, but worries persist

An almost-deserted Changi Airport terminal 3 due to a large number of cancelled flights, on March 24, 2020.
An almost-deserted Changi Airport terminal 3 due to a large number of cancelled flights, on March 24, 2020.ST PHOTO: GAVIN FOO

Measures announced for the aviation sector will provide much-needed relief but some firms are still hoping for more help in the near term given that business has almost ground to a halt.

Deputy Prime Minister Heng Swee Keat announced on Thursday a $750 million aid package to help the industry through the "single biggest shock" that the global aviation sector has ever experienced.

More than $400 million will go into an enhanced Jobs Support Scheme to help firms offset up to 75 per cent of wages for local workers while $350 million will go into various rebates to help reduce business costs.

Singapore Airlines said in a statement yesterday: "All of the measures provide some much-needed relief for SIA amid this unprecedented crisis.

"It will bolster our ongoing measures to overcome the current challenges, while we continue to focus on getting as many of our passengers as possible back home safely and protecting the jobs of our people."

SIA said the government measures, coupled with its own plans to raise up to $15 billion with the help of Singapore's Temasek, will ensure that the airline is equipped with resources to overcome the challenges.

It will also enable it to be in a position of strength to "grow and reinforce its leadership in the aviation sector", a spokesman added.

Airport and food service provider Sats also welcomed the move.

Its president and chief executive Alex Hungate said: "This level of support significantly increases our capacity to protect jobs during this downturn, preserving our organisational capabilities, readying us for when flight and passenger volumes start to improve."

Ground handling firm dnata Singapore agreed that the support will help it to retain its workforce, with operations now close to a standstill.

Chief financial officer Musdalifa Abdullah praised the package but added that the firm was hoping for help in two more areas.

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This level of support significantly increases our capacity to protect jobs during this downturn, preserving our organisational capabilities, readying us for when flight and passenger volumes start to improve.

MR ALEX HUNGATE, president and chief executive of airport and food services provider Sats.

He noted that the firm is taking the downtime to upskill and redesign jobs for its staff. "dnata Singapore's in-house resources spent on training is very specific and customised to the needs of airlines.

"Unfortunately, this area was not covered by the announcement."

Mr Musdalifa added that the firm was also hoping for grants to retain and further train staff who are work permit holders. "Many of them are facing challenges as there is little or no work available and due to travel restrictions, some cannot return home."

Meanwhile, FNA Group International, which owns and operates chocolate retailer The Cocoa Trees, hopes that the Government will give businesses at the airport more support in terms of wage subsidies.

Its revenue at Changi Airport has dropped to almost zero since short-term visitors were barred from entering Singapore on Monday, forcing it to close six of its eight stores at the airport.

Group chief executive Paul Loo said 90 per cent of the firm's retail revenue comes from the airport stores but as FNA's business is classified as retail and distribution, Mr Loo said it will receive only 25 per cent wage support for its local staff.

This is in contrast to the 75 per cent wage support granted for firms whose main businesses are deemed to be in the aviation sector.

"We have retained all of our local staff working in our shops at the airport, so the amount of support we receive on their wages during this time of almost-zero sales is very crucial," he said.

A version of this article appeared in the print edition of The Straits Times on March 28, 2020, with the headline 'Much-needed relief for aviation sector, but worries persist'. Subscribe