'We are not going to let up on the various measures that we have for controlling costs'
Singapore Airlines’s (SIA) CEO said retrenchment is the last thing on their minds right now. This, while the rest of the aviation sector resort to bailouts and layoffs to contend with mounting losses and debt.
Goh Choon Phong said their “immediate focus” is to manage costs and work on transforming the organisation.
They will however continue with cost-cutting measures, in place since the start of the crisis.
“We are not going to let up on the various measures that we have for controlling costs, including staff costs,” Goh told The Straits Times (ST). “The pay cuts and (compulsory) no-pay leave will continue.
“We also have voluntary no-pay leave, and we have actually had a very significant take-up on it.”
SIA has tapped on the government’s Jobs Support Scheme, which offers firms in the hard-hit sector wage support up to 75% for nine months.
Additionally, SIA staff, including crew members have been offered alternative job openings as well as volunteer opportunities while the bulk of their flights remain grounded. Things may soon pick up for staff as SIA makes plans to resume flights to several destinations, including Amsterdam, Hong Kong and Melbourne.
The firm has also recently secured over $10 billion in fresh liquidity through recent rights issue as well as credit lines, including short-term loans with several banks, reported ST.
“SIA will remain steadfast and agile during this period of great uncertainty and continue to act nimbly in responding to the evolving market conditions,” Goh said while thanking shareholders and banks for their support.
READ MORE: How to manage retrenchments with dignity
Meanwhile, airlines such as Cathay Pacific secured a $5billion bailout package from the Hong Kong government to avoid a “collapse of the company”. Cathay has cut executive salaries and staff are on voluntary unpaid leave – but the company said that job cuts are still possible.
And recently Thai Airways became the first Asian national carrier to file for bankruptcy, with the government agreeing to support a ‘rehabilitation’ and ‘restructuring’ plan. The carrier’s labour union supported the idea but strictly opposed anything that would impact employee welfare.
Popular budget carrier AirAsia has also sought help from banks to fund its operations. However, they have reportedly made plans to cut about 300 jobs, including pilots, cabin crew and engineers.
The International Air Transport Association last month said the global airline industry’s debt could rise by 28% to $550 billion this year, which includes $123 billion in financial aid from governments.
