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Fri, Jul 16, 2004 - Page 12 News List

Singaporean officials push wage deals at airlines


Singapore has stepped up pressure on unions at Singapore Airlines to agree to flexible pay, telling them the flag-carrier "has to restructure its cost base" because of the rising challenge from low-cost carriers and impact of new technology.

"Wage restructuring is absolutely necessary for the airline to remain competitive," said Lim Boon Heng, head of the National Trades Union Congress and a minister in the prime minister's office in remarks sent to reporters yesterday.

He told a gathering of union members late Wednesday that Sing-apore Airlines' wage system was "seniority-based," and therefore problematic.

Ministers in the city-state take a close interest in the commercial affairs of state-linked group, which is 58-percent held by the finance ministry's investment arm, Tema-sek Holdings.

The scrutiny -- including blunt interventions from Senior Minister Lee Kuan Yew (李光耀) -- appears to be driven by Singapore Airlines' high-profile, its link to the government, and the importance of logistics to the overall economy.

"Low-cost and low-frills carriers provide a competitive business model to challenge the established network carriers," Lim said. "The developments will test Singapore Airlines' skills."

Lim's remarks came as pilots at SilkAir, Singapore Airline's regional arm, agreed to a new wage deal that will mean 40 percent of their pay is variable and tied to profits, the Business Times newspaper said yesterday.

Lim said Singapore Airlines' pilots and cabin crew accounted for 61 percent of the group's headcount and 64 of its wage bill. However, he added that the pilots alone accounted for 14 percent of staff, but represented a third of the total wage bill.

"The pilots possess essential skills that fetch a premium. But if we need to restructure the wage package it has to be done for all categories of employees," Lim said.

When government officials refer to wage restructuring, they are arguing for performance-related pay, a long-standing policy objective.

Singapore Airlines' has struck flexible-wage deals with two of its five unions. It remains in talks with three others, including the Air Line Pilots Association-Singapore, or Alpa-S.

The president of the pilots' union, Mok Hin Choon, said yesterday: "We do, at Alpa-S, embrace and agree with the need for wage restructuring, we are trying very hard to work with the company to come up with something amicable to both [sides]."

"The problem is getting down to the nitty-gritty, like the numbers," he said.

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