Singapore Airlines Group Cuts 4,300 Jobs
National carrier Singapore Airlines (SIA) Group on Thursday (10 September) announced that it will cut some 4,300 jobs across its three airlines. Qantas and other carriers have already taken similar steps and others will definitely follow.
The cuts will result in the laying off of about 2,400 staff from SIA, SilkAir and Scoot in Singapore and overseas stations – after taking into consideration a recruitment freeze, natural attrition and voluntary departures involving some 1,900 staff.
“Discussions have begun with our Singapore-based unions. The Group will work closely with them to finalise the arrangements as soon as possible for those affected, and try to minimise the stress and anxiety on our people,” said SIA in a statement posted on the Singapore Exchange website late on Thursday.
SIA said the decision was “taken in light of the long road to recovery for the global airline industry due to the debilitating impact of the COVID-19 pandemic, and the urgent need for the Group’s airlines to adapt to an uncertain future”.
It added that it is in an even more vulnerable position compared with most major airlines in the world. As it correctly pointed out, Singapore “does not have a domestic market that will be the first to see a recovery”.
“In order to remain viable in this uncertain landscape, the Group’s airlines will operate a smaller fleet for a reduced network compared to their pre-COVID-19 operations in the coming years,” it added.
SIA Group operating at only 8% of pre-pandemic capacity
Meanwhile, SIA chief executive Goh Choon Phong said the airline’s priorities from the outset of the pandemic were to ensure survival and save as many jobs as possible.
In a statement to employees, Goh said SIA has already raised $11 billion through its rights issue, secured financing, and additional lines of credit. The company will continue to explore other sources of financing.
“The Group has significantly reduced capital and operating expenditure since the onset of COVID-19 by deferring non-critical projects, and by working with suppliers and partners to reduce costs, reschedule payments, and adjust aircraft delivery streams. We have also implemented human resources measures such as salary cuts and no-pay leave schemes,” he said.
But Goh added that the future remains “extremely challenging” as the pandemic is still not under control, with some countries having second and third waves; the lack of a vaccine; and tight border restrictions.
“Global economic growth remains anaemic, with little impetus for the return of international leisure and business travel. We saw a catastrophic 99.5% decline in passenger carriage in the first quarter of FY20/21,” he said.
“Today the SIA Group operates only 8% of our capacity compared to pre-COVID levels, and we expect to be at less than 50% at the end of the financial year. In the meantime, the prognosis for air travel has worsened, with industry groups projecting that passenger traffic will not return to pre-Covid levels until 2024.”
Having to let go of valuable and dedicated people is “the hardest and most agonising decision” that he has had to make in his 30 years with SIA, said Goh.
“For our impacted colleagues, please know that this is not a reflection of your individual strengths and capabilities. It is the result of an unprecedented travel paralysis brought about by a global pandemic.”
The chief executive added that the retrenchment process will be conducted “in a fair and respectful manner” and that the company will “do our best to ensure that you receive all the necessary support during this very trying time”.
“What we have dreaded all these months has happened,” wrote Transport Minister Ong Ye Kung in a Facebook post.
“We know how badly SIA is hit by COVID-19. Over the past few months, the Singapore Government has rolled out support measures, including the Jobs Support Scheme, to defray business costs and protect jobs. The aviation sector received the strongest support. SIA has also raised significant capital with the support of its majority shareholder.”
He added that SIA delayed the job cuts for “as long as they can” and called it inevitable given the impact of COVID-19. The government “will do all we can” to support the affected workers, said Ong.
“I am sure their skills are much needed elsewhere too. More importantly, we will continue to press on, to restore air travel in a safe manner, to get SIA planes back up in the sky, and revive our air hub,” he added.
In his May Day message in April, Prime Minister Lee Hsien Loong said “The Government is determined that SIA will see through this crisis,”. “SIA has always flown Singapore’s flag high all over the world and made us proud. We will spare no effort to enable it to do so again.”