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Singapore Airlines Ltd., the world’s largest carrier by market value, said its pilots agreed to take one day of no-pay leave each month starting July as it reduces capacity and costs amid slumping demand for air travel.
The company’s management will also have salaries cut by at least 10 percent starting in July, and Chief Executive Officer Chew Choon Seng’s pay will be reduced by 20 percent, the carrier said in a statement to the Singapore stock exchange today. Pilots will have their wages reduced by 65 percent of one day’s pay, pro-rated, from their monthly basic salary, it said.
Airlines globally are shedding jobs and routes to combat losses that may reach $9 billion this year as the worldwide recession hammers travel, according to the International Air Transport Association. Singapore Air said it will save S$21 million ($14 million) this financial year from pay cuts and fewer working days.
“The airline has surplus pilot resources because of the cutback in flights following the sharp fall in demand for air travel,” the company said. The agreement with the pilots “augments a series of measures taken by SIA to mitigate the burden of costs of excess staff resources resulting from the global business downturn.”
The carrier and the Air Line Pilots Association of Singapore union signed the agreement yesterday after months of negotiations. Singapore Air earlier this year proposed captains take three days off and first officers four days leave without pay every month, according to P. James, president of the pilots’ union.
Senior management at the carrier started working fewer days each month beginning in April, followed by other managers, ground staff and cabin crew in May. The airline will decommission 16 planes, reduce flights and plans to remove 11 percent of capacity in the year ending March 2010.
Singapore Air’s board of directors volunteered to have their fees cut by 20 percent, the company said today.