Singapore Airlines (SIA) said it has reached agreement with its pilots’ union on pay cuts and unpaid leave as part of cost-cutting efforts to counter the effects of the global economic downturn.
SIA said in a statement issued late on Friday that pilots have agreed to take a day of leave each month without pay.
Pilots also agreed to take a cut of 65 percent of one day’s pay out of their monthly basic salary, the airline said.
It said the measures, which will take effect from July 1, were necessary as “the airline has surplus pilot resources because of the cutback in flights following the sharp fall in demand for air travel.”
SIA had earlier reached agreement with its other staff unions on cost-cutting measures, including shorter work months and grounding some of its planes.
The airline said nearly 2,000 employees have signed up for its voluntary no-pay leave scheme, under which staff could apply for leave without pay for durations of up to two years.
In addition, SIA management will take 10 percent to 20 percent salary cuts from next month and the board of directors volunteered to have their fees cut by 20 percent.
The airline industry has been among the worst hit by the global economic slump that has crimped travel demand. SIA said last month its fourth-quarter net profit dropped 92 percent from the previous year to S$41.9 million (US$29 million).
Earlier this month, the International Air Transport Association (IATA) said the world’s airlines are expected to lose US$9 billion this year, almost double an estimate it made just three months ago.
This is in addition to the US$10.4 billion global airlines are estimated to have lost last year, IATA said.
In Germany, Deutsche Lufthansa AG has warned that because of falling passenger numbers and rising fuel costs, it will need to enact further cost-saving measures to protect its earnings.
In a statement on Friday the Cologne-based company, Europe’s second-largest airline by sales behind AirFrance-KLM, said “persistently weak demand development in passenger and freight business, structural changes in passengers’ travel behavior and rising fuel prices,” have forced it to take steps to maintain its operating profit.
It did not elaborate.
Lufthansa reported a first-quarter net loss of US$339.6 million in April.
Meanwhile, Air India, which has delayed salary payments, asked employees to help the country’s national carrier tide over the financial crisis it’s facing.
“It is a fight for survival,” Arvind Jadhav, chairman and managing director, said yesterday in a release.
Air India is faced with the same issues that others in the aviation industry have been contending with, Jadhav said.
The airline has sought funds from the government, which owns the company.
RSS