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Mon, May 26, 2003 - Page 12 News List

Singapore Airlines may lose around S$1 billion

BLOOMBERG , SINGAPORE

Singapore Airlines Ltd may lose as much as S$1 billion (US$580 million) this year, Prime Minister Goh Chok Tong said, after the number of travelers using the carrier dropped by 50 percent amid the outbreak of a deadly virus.

Wage reductions are needed to help Singapore Airlines stay viable, and the pilots should accept salary cuts Goh said.

The union is refusing to take compulsory unpaid leave unless the company fires its non-Singaporean pilots overseas.

Asian airlines including Cathay Pacific Airways Ltd and Qantas Airways Ltd have cut more than 1,150 weekly flights as SARS kept travelers at home.

Singapore Air lost S$204 million last month and forecasts its first quarterly loss in the three months ended June 31.

The airline "is in an emergency" and "could well go into the ICU," or intensive-care unit, Goh said yesterday, according to a transcript provided by his office.

He spoke to reporters after addressing a gathering in a Singapore neighborhood.

The airline, which has grounded nine of its 96 airplanes, is in talks with Boeing Co and Airbus SAS to delay aircraft deliveries.

The company, with about 30,000 workers, has also asked 6,600 of its cabin workers to take a week of unpaid leave every two months.

Singapore Airlines wants to save S$200 million this year from wage and employee-related costs. The company's profit rose 69 percent to S$1.06 billion in the year ended March 31.

Singapore Airlines shares have fallen by 30 percent in the past 12 months, more than the 23 percent drop in the benchmark Straits Times Index.

The shares account for 6 percent, the sixth-largest portion, of the index.

On Friday, they closed at S$9.55 on the Singapore Stock Exchange.

Singapore and Hong Kong, the second-worst hit city after Beijing, both said they would cut their economic growth forecasts because of SARS.

Tourism accounts for about 10 percent of the GDP in both of the cities.

Singapore has closed schools and quarantined people infected with the virus as it battles the disease.

It hasn't had a case since May 18 and may be taken off the World Health Organization list of areas with locally transmitted infections within a week.

Singapore's latest case on May 18 is considered locally transmitted and not imported, the WHO said.

Hong Kong also seems to have begun to get a grasp on its epidemic, with no new cases having been reported yesterday.

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