The management of Singapore Airlines met with leaders
of the three staff unions early on Monday to discuss the airline’s
plans for mitigating the impact of the global economic downturn.
In view of falling demand, as reflected in
advance bookings, Singapore Airlines has confirmed it plans to reduce capacity in
the coming financial year, commencing April 2009 and ending March
2010, by 11% from the preceding twelve months.
In the course of the year, 17 aircraft will be
decommissioned from the operating fleet. Before recession hit
major markets, the plan was for only four aircraft to be phased
out – one for conversion to a freighter, and three to be returned
to lessors at completion of lease contracts.
Singapore Airlines Chief Executive Officer, Chew
Choon Seng, said, “The drop in air transportation has been sharp
and swift. Given the falls of over 20% that we have seen recently
in air cargo shipments, and the tradition of demand for air travel
following closely behind trends on the cargo side of the business,
we have to face the reality that 2009 is going to be a very
“Singapore Airlines does not have a domestic
operation to soften the blow from the slump in international air
traffic, and we have to act decisively to address the situation.
We have determined the capacity to be operated that will enable
the airline to remain viable in a shrinking market, but the
removal of surplus capacity will result in redundant resources and
will draw sacrifices from every one of us in the company.
“We have already taken action such as expanding
and stepping up training and re-training programmes, and we will
contemplate retrenchment only as a last resort, but we do not have
the luxury of time and we need to agree and act on some measures
quickly so that we can push back the point of retrenchment as far
as possible and improve our chances of avoiding it altogether.”
Apart from containing costs without compromising
on safety, security and quality of service, the company is
engaging the unions on measures that will affect staff. Such
measures include accelerated clearance of leave entitlements,
salary cuts, voluntary leave without pay, voluntary early
retirement and shorter work months.
“The company will work with the staff and the
unions in forging a consensus on the action plans. Together in
cooperation, we will rise to the challenges confronting us and
ride out the storm,” Mr. Chew said.
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