Singapore Airlines Ltd, which had operating losses in April and May, plans to cut its pilots' pay for the second time in slightly more than a year to help pare costs.
The pilots will have a pay cut of as much as 16.5 percent, take as many as two days unpaid leave a month and receive a one-time payment as compensation, Loh Meng See, Singapore Air's senior vice president of human resources, said in court.
The carrier's accord with the Airline Pilots Association of Singapore, which represents 1,600 pilots, concludes some two months of negotiations.
The decision may help the carrier, which employs about 30,000 people, win wage cut agreements from other unions as it wants to lower labor costs by at least S$200 million (US$114 million) annually. The SARS outbreak led to a slump in travel demand, which left its planes half empty and prompted Asian airlines to cut more than 1,150 weekly flights.
"They struck a middle ground and it will be easier now for the rest of the unions to follow on from here," said Teo Hiang Boon, an analyst at G.K. Goh Research Pte.
The wage cuts will take effect this month and last until next March. The court will convene again on Saturday to decide whether to accept yesterday's preliminary agreement.
Singapore Air also cut its employees' wages in February last year after travel demand fell because of the terrorist attacks on the US in 2001.
The carrier has told the pilots' union that even with the wage cuts, more jobs may be lost, said P. James, vice president of industrial relations for the pilots union.
Singapore Air fired 414 workers in the middle of last month, the biggest round of job cuts since its founding in 1972.
``The outbreak of SARS, which was preceded by the Iraqi war and the global economic slowdown, has adversely affected our business,'' Loh said in Singapore's Industrial Arbitration Court. ``There is therefore an urgent need for the company to take measures to reduce costs to ensure its long-term viability and competitiveness.''
Under the agreement, Singapore Air will return a quarter of the pilots' wage cuts if the company earns S$200 million net profit. The pilots will get 115 percent of their wage cut if earnings reach S$600 million.
``Nobody likes their pay to be cut, but this is something that we have to do,'' James said.
Singapore Air's chief executive officer Chew Choon Seng helped secure the one-off compensation, he said.
The carrier originally wanted workers to take a pay cut of as much as 22.5 percent and as many as 12 days unpaid leave every two months. It had offered its pilots a one-off payment matching their wage cuts for the fiscal year ending next March, if the company earns more than S$700 million.
The pilots had countered with a proposal for a wage cut of as much as 12 percent and the compensation payment if the company earns more than S$350 million.
Singapore Air may not reach its S$200 million savings target given the lower wage-cut agreement, Teo said.
The airline, which has been profitable since going public in 1985, had a total operating loss of S$370 million in April and May.
Singapore Air has cut about a third of its capacity because of the disease and is now selling cheaper tickets to lure travelers. It filled 53.1 percent of seats with paying passengers in May, down from 72 percent a year earlier.
TAIPEI REACTIONS: Joanne Ou decried China’s ‘gangster diplomacy,’ while MOFA said its Fiji counterpart dealt fairly with the incident and protected the trade office’s rights The world should denounce the actions of Chinese embassy staffers in Fiji against a Taiwanese diplomat during a National Day celebration in Suva, the Ministry of Foreign Affairs (MOFA) said yesterday as it thanked the Fijian government for its help after the Oct. 8 incident. Two Chinese diplomats tried to force their way into a celebration held by the Taipei Trade Office in Fiji at the Grand Pacific Hotel in Suva on Oct. 8, and a Taiwanese diplomat who tried to stop them taking photographs suffered a head injury. MOFA spokeswoman Joanne Ou (歐江安) told a news briefing that the ministry
The US, Japan and Australia conducted trilateral naval exercises in the South China Sea on Monday, the US Seventh Fleet announced yesterday. It was their fifth joint operations this year in the fleet’s area of operations, it said in a statement. The Arleigh Burke-class guided-missile destroyer USS John S. McCain joined the JS Kirisame of the Japan Maritime Self Defense Force and the Royal Australian Navy’s HMAS Arunta. The Arunta’s commanding officer, Commander Troy Duggan, said that Australia was continuing to build on its already close relationship with Japan and the US. “This activity is a valuable and important opportunity for all three nations,”
ONGOING PROBE: A former Military Intelligence Bureau colonel, major general and another colonel, as well as five other people, have been questioned by prosecutors The Taipei District Court yesterday ordered that a retired colonel from the Military Intelligence Bureau (MIB) calling himself Taiwan’s “first special agent” be detained and held incommunicado as part of an ongoing investigation into espionage allegations targeting at least three former bureau officials. The Taipei District Prosecutors’ Office was seeking to detain former MIB colonel Chang Chao-jan (張超然) over his alleged involvement in introducing retired agents to Chinese national security authorities and passing confidential documents to China. Chang’s actions, if proven, would contravene the National Security Act (國家安全法), which carries a prison term of three to 10 years, and the National Intelligence
Seabed waste off the west coast is 1.5 times higher than the global average, with the mouth of the Tamsui River (淡水河) nearly 90 times dirtier, the environmental consultancy IndigoWaters (澄洋環境顧問) said yesterday. The firm in September last year began collaborating with local oceanographers on Taiwan’s first survey of seabed waste off the west coast, collecting 6,000 samples from near the mouths of eight rivers and conducting 215 inspections. Of the samples, 83.3 percent were found to contain trash, the group said. Based on the survey, every square kilometer of seabed had about 121,074 pieces of trash weighing 102kg, IndigoWaters chief executive Yen