Singapore Airlines (SIA) has frozen hiring and is considering other measures, including asking staff to go on voluntary no-pay leave, The Straits Times has learnt.
Three rounds of flight cuts mean fewer flying hours, leaving the airline with excess manpower of more than 500 cabin crew members and around 50 pilots, ST understands.
In response to queries yesterday, SIA said: "In response to Covid-19, a general recruitment freeze has been implemented for all ground positions, and non-essential duty travel has been suspended.
"We are closely monitoring the situation and will be decisive in implementing any additional measures that may be needed. We will not do anything, however, that compromises SIA Group's long-term competitiveness."
In a note to all SIA staff yesterday, chief executive officer Goh Choon Phong said the coronavirus outbreak had caused a significant drop in demand, with passenger traffic and load factors rapidly declining in all markets.
He said the group - made up of SIA, 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.
SIA had on Monday announced additional cuts to its flights between this month and May, following its decision last Tuesday to cancel more than 700 flights.
Said Mr Goh: "We will continue to be nimble and flexible in adjusting our capacity to match the changing demand patterns in the market."
He added that other preventive measures to conserve cash and reduce costs have been taken.
On the revenue side, Mr Goh said the group's commercial teams are working with tourism agencies and travel partners around the world to "aggressively drive sales, and jointly promote air travel to and through Singapore".
He also told staff that SIA is tackling the challenges posed by the outbreak from a position of strength due to a three-year turnaround plan introduced in 2017, which had sought to review work processes and operations amid fierce competition that has eroded profits.
Mr Goh said the plan has strengthened SIA's revenue-generating capabilities and driven operational efficiencies.
He also thanked staff for ensuring the safety of all customers and other staff despite the tough challenges.
Aviation analyst Brendan Sobie of Sobie Aviation told ST that it was inevitable that airlines had to resort to cost-cutting measures, and expects SIA and other airlines to implement unpaid leave schemes soon, given that demand is likely to remain weak for some time.
"Cost cutting is an option for all airlines but it is somewhat limited as most airline costs are fixed," he added. "Virtually all of Asia's main airline groups will be unprofitable the first half of this year."
Changi Airport Group (CAG) said yesterday that total passenger traffic at the airport fell by more than 25 per cent in the first two weeks of this month compared with the same period last year. Traffic between China and Singapore alone dropped by more than 85 per cent, CAG said.
The outbreak has reversed a promising start to the year. The airport handled 5.95 million passengers last month, an increase of 5.2 per cent compared with the same period last year.