Singapore Airlines said Wednesday that 1,405 of its employees volunteered to take unpaid leave but it was not enough to steer the airline through the current tough times.
“We have approved 1,405 applications from staff for voluntary no-pay leave during the financial year which begins today,” a company spokesman said Wednesday. “The vast majority of these come from cabin crew and are also for periods of less than one month.”
The staffing reductions would help meet cuts in flights, but other measures would be required, the official said.
The airline is pursuing proposals for a shorter work month for all staff, details of which are to be announced soon.
Singapore Airlines said it has reached agreements in principle with two of its key unions, the Singapore Airlines Staff Union and the Airline Executive Staff Union, for shorter work months from May 1.
Senior management was already on the scheme while discussions were ongoing with the pilots union.
Even with all these measures in place, the airline said it could not rule out further actions to contain costs if the economic downturn and travel slump worsens.
The steps taken so far were necessary because of plans to cut capacity – measured in terms of the number of seats available and total distance flown – by 11 per cent over the next 12 months.
Singapore Airlines plans also to take 17 aircraft from its fleet of more than 100 planes out of service for at least a year.
It carried 1.18 million passengers in February, down 20.2 per cent from the same month a year earlier.
Cargo volumes also slipped by 16.9 per cent to just below 80 million kilograms with Singapore Airlines filling 56.7 per cent of available freight space.
Singapore Airlines implements shorter work months
Singapore Airlines (SIA) on Wednesday announced shorter work months for management and ground staff as part of cost-cutting measures to deal with the impact of the global economic crisis.
A company statement said it will also implement a wage freeze for managers and warned it cannot rule out further measures to keep costs down if the worldwide downturn worsens.
Senior management staff will start shorter work months from April 1. The reductions will apply to all other managers and ground employees from May 1, the airline said.
Discussions are under way with pilots, the company added.
“In addition, a wage freeze will be implemented for all employees in the management grades for the coming financial year,” SIA said.
“The airline cannot rule out further measures to contain costs if the downturn worsens.”
SIA, regarded as a bellwether for the airline industry, has reported a steep drop in passenger and cargo volumes because of the crisis, which has hurt global travel and trade.
It said last month it would receive four Airbus A380 superjumbos as planned this year but could not rule out deferring future deliveries of the world’s biggest airliner.
In February it said it will ground 17 passenger aircraft over the financial year from April 2009 to March 2010.
SIA, majority owned by Singapore sovereign wealth fund Temasek Holdings, reported a 42.8 percent fall in net profit in the third quarter to December, to 337 million Singapore dollars (221.5 million US).
Travel agents seek to end row, approach Uddhav Thackeray
Sudha Menon & P.R. Sanjai
Wall Street Jounal
In their ongoing agitation against Singapore Airlines, representatives of the Travel Agents Association of India, or Taai, and Travel Agents Federation of India, or Tafi, have decided to approach Shiv Sena leader Uddhav Thackeray to mediate in the imbroglio, said Rajji Rai, president of Taai.
Rai said Thackeray is expected to revert soon. “Everything will be clear on 2 April,” he said. “Thackeray is an important political figure in Maharashtra.”
Brokering peace: Shiv Sena leader Uddhav Thackeray. PTI
Late in 2008, Singapore Airlines decided to do away with the 5% agent commission on each ticket; in retaliation, at least half a dozen travel agents associations boycotted the carrier. The travel agents maintain that the zero commission model will not work in India.
Some other carriers, both domestic and international, had earlier gone back on their zero commission policy and reached an agreement with travel agents for a 3% commission on gross fare of a ticket. That deal, however, was struck after the agents took help from CPI(M). Biji Eapem, president of the Iata Agents Association of India, or IAAI, and other travel agent associations had involved various other political parties to lobby for them.
“We continue to be open to dialogue with our agents to come to a mutually beneficial solution to the issue and have offered them a performance-linked incentive scheme. Separately, we are also engaging with individual agents who continue to ticket Singapore Airlines,” said C.W. Foo, Singapore Airlines’ general manager (India).
“The agents are an integral part of our business but they must understand that not all the agents give us the same amount of business and so it is only good business sense that the ones who give more volumes get incentives,” Foo said.
For their part, travel agents are also concerned about resolving the issue, even as they continue to dare each other. “When we started agitating against the airlines in December, it was not our intention to fight, but it is more than a 100 days now and we have to get this issue resolved,” Rai said. “Among other things, we are planning to surrender the ticket stock that each agent gets and also write to the Singapore Prime Minister.”
Eapen said that the travel agents will send 100,000 emails to the prime minister of Singapore, as well as flood the inboxes of the 14 international airlines that are currently not paying commission. Delta Air Lines and British Airways are also moving to the zero commission model begining Wednesday, Rai said.
Also on 2 April, at least 3,500 members of Taai and Tafi will meet to chart out a strategy to intensify the agitation. “At the meeting we will also decide how to deal with the 14 other foreign airlines that have taken away our commission”, Rai said. “We can’t take on all of them together, but we will decide to take on at least one more foreign airline.”
Indian carriers including National Aviation Co. of India Ltd, that runs Air India, and Jet Airways (India) Ltd restored the commissions of agents after the latter boycotted them late last year.
However, not all is all hunky dory in the travel agents tent. Last week, about 40 members, or about half of the Andhra Pradesh chapter of Tafi, met informally to discuss the state of affairs and most of them decided it was time they got back to business, a person with knowledge of the meeting said.
Former Taai vice president C.V. Prasad, who runs Hyderabad-based TravelExpress agency, confirmed the development to Mint. “It was an almost unanimous decision to call off the agitation and go back to ticketing with Singapore Airlines,” he said. “Next week the Hyderabad chapter will meet formally to discuss how to take this decision forward. After all, every day lost is business lost and the agents want to move on with life and business.”
That national body, though, is in no mood to relent. Ajay Prakash, national general secretary of Tafi, said: “It hardly matters if 35 travel agents out of 2,876 accredited agents decide to go back to ticketing for Singapore Airlines, which is now threatening agitating agents to take away the authority of selling its tickets. Singapore Airlines cannot win this war without the support of travel agents.”
Tafi’s Lulla also says that the time for dialogue is over, saying the zero commission model will not work in India, where customers are price sensitive and will not pay a transaction fee to the agent. “No discussion, we only want our commission,” he said. “Indian customers won’t pay transaction fees and we will be left with no choice but (to) close down business or lay off people, both of which are not great options.”
Foo, however, maintains that the issue is up for discussion and that it has been misinterpreted “(The) world over this is the trend. We understand where the agents are coming from. Consumers have to realize that the agents are offering them advice and consultation and they have to pay for this service. Travel agents are perhaps the only people who are not paid for their services”.