Singapore government backs SIA staff cutbacks
Singapore government backs SIA staff cutbacks
Agence France-Presse, Singapore
Deputy Prime Minister Lee Hsien Loong on Tuesday backed Singapore Airlines' (SIA) decision to lay off pilots and cabin crew, saying it was necessary to keep the Singapore icon competitive.
The carrier, nearly 57 percent owned by the government investment arm Temasek Holdings, must restructure wages and keep costs down while maintaining its premium service in order to outperform competitors, he said in a speech at a conference of the National Trades Union Congress (NTUC).
Lee, who is also finance minister, underlined the importance of SIA to the Singapore economy and the city-state's international reputation for quality service and efficiency.
"Whether SIA prospers affects not only SIA's workers but the whole economy and our international reputation," he said.
The airline, which faces its first ever loss in the current financial year, said Monday it was laying off 26 pilots and 156 cabin crew on top of the 414 retrenched last month.
SIA has been among the high-profile casualties of the plunge in travel demand induced by the Severe Acute Respiratory Syndrome (SARS) which peaked in East Asia in April and May before it was contained.
At a forum after his speech, a trade union delegate asked Lee why SIA proceeded with the retrenchments despite a pickup in travel demand even after employees agreed to take wage cuts and unpaid leave.
"Retrenchment is always an unhappy business... but (from) time to time it has to be done and we just have to see how it is done and whether it is justified and whether it is properly handled," Lee responded.
SIA's role is changing," he said, citing how other major carriers like United Airlines, American Airlines, British Airways and Australia's Qantas have slashed staff and restructured their companies.
"If SIA does not do it, will it still be in business?"
Lee warned this may not be the last round of retrenchments involving Singapore companies.
"If we say no to retrenchments, then we may not have retrenchments but closures... remember Swiss Air, it was one of the top airlines in the world but today it doesn't exist.
"If Swiss Air can run into trouble like that, SIA can also run into trouble... I think we should make sure that we keep the company (SIA) flying and flying high," he said.
NTUC secretary general Lim Boon Heng said the retrenchments were part of a package of cost-cutting measures taken by SIA.
"The pay cut was not as much as the management originally wanted, so they had to carry out some retrenchments. Fortunately with the recovery, the number of people who were retrenched was not as high as originally thought."
In his speech, Lee said SIA faces twin threats from other major carriers which were forced to shape up and improve efficiency after the Sept. 11, 2001 terrorist attacks in the United States and SARS, as well as from the emergence of budget airlines in Asia.
"This does not mean that SIA should drop the Singapore Girl," he said, referring to the globally recognized image associated with the SIA's top-quality inflight services.
"SIA targets the higher end (of the market)... and premium service will remain its selling point but SIA will have to cut costs, lower prices and offer even better service in order to outperform its competitors, or else see its business taken away."
Pilots have had their monthly salaries slashed by 16.5 percent and first officers by 11 percent. The pilots' union also agreed members would take up to two days of unpaid leave a month.
Other SIA staff took wage cuts of up to 11 percent.
SIA recorded historic losses during the height of SARS in April and May as travelers shunned East Asia, which bore the brunt of the 800 SARS deaths out of more than 8,000 infections worldwide.