By Timothy Ouyang, Channel NewsAsia | Posted: 30 July 2009 2141 hrs
SINGAPORE:
An estimated 12,000 non-management staff at Singapore Airlines (SIA) will take a pay cut of 10 per cent for at least three months starting from August 1. This comes after the carrier posted a S$271 million loss at the company level in the first quarter.
As a group, SIA's net loss was S$307.1 million for the three months ended June 30, compared to a net profit of S$358.6 million a year earlier.
Under current union agreements, a pay cut is automatically triggered if the airline suffers a net loss of S$50 million at the company level in any given quarter.
The quantum is determined by the amount of losses. The pay cuts start at 2.5 per cent if the carrier loses S$50 million at the company level, and go up to as much as 10 per cent if the losses exceed S$200 million.
The 10 per cent pay cut involves non-managerial staff, as managerial staff have already taken pay cuts ranging from 10 to 20 per cent, according to an SIA spokesman.
Channel NewsAsia understands the bulk of those affected comprise cabin crew, pilots and ground staff employed in Singapore.
The SIA spokesman told Channel NewsAsia that the pay reduction may continue beyond November even if the carrier posts a profit in the second quarter. This is because the losses are calculated accumulatively throughout the financial year.
- CNA/vm/al
-- Sat Aug 01, 2009 12:58 am --
Analysts say SIA has to relook business model to turn around losses
By Asha Popatial, Channel NewsAsia | Posted: 31 July 2009 2246 hrs
SINGAPORE:
Singapore Airlines (SIA), the world's second biggest carrier by market value, may need to relook its premium class-dependent business model, if it is to turn around from its current losses. Analysts said this is because consumption patterns have changed the picture of an industry that is unlikely to return to pre-crisis levels.
SIA flew into the red on Thursday, with its first quarterly loss in six years. Japan's ANA and British Airways also announced first quarter losses on Friday.
Market watchers said while there are some signs of bottoming out, real improvements in passenger and cargo numbers are expected to be gradual and will only start next year.
SIA, which warned that it is facing its first potential annual loss since going public, said it may consider further capacity cuts if demand slumps further, although it reiterated that laying off staff remains a last resort.
Going forward, SIA said it does not expect a rapid recovery but a prolonged period of difficult times.
Asia editor, Flight International, Siva Govindasamy, said: “Their main business model hinges on three main things - the premium business-class seats, the long haul market, and cargo market. And unfortunately for them, the economic crisis has resulted in all areas being badly affected."
For a carrier which has no domestic market to fall back on, a wide-bodied fleet, which means more seats to fill, and a premium class that is not making enough money, analysts said SIA has to make changes.
Aviation analyst, Standard & Poor's, Shukor Yusof, said: "We were surprised to see that break even load factor has risen to just over 84 per cent, which is about 10 percentage points increase. What this means is that they are taking in more passengers but yields are getting lower.
"SIA is a luxury carrier. They may have to look at becoming a normal carrier instead of a luxury carrier. If previously, they were catering to mostly business and first-class passengers, (now they have to) find a niche between economy and business-class."
In the meantime though, what the carrier has is a strong cash position.
- CNA/yt
-- Mon Nov 16, 2009 9:14 pm --
SIA's load factor rises slightly on-month to 71.6% in October
By Wong Siew Ying, Channel NewsAsia | Posted: 16 November 2009 2046 hrs
SINGAPORE:
Singapore Airlines said that it filled 71.6 per cent of the space available on its planes for passengers and cargo in October, compared to 70.3 per cent in September. This latest figure is also 4.8 percentage points higher than the load factor during the same period in 2008.
The carrier said there are encouraging signs that the decline in demand may have bottomed out, with increasing demand seen in the premium classes.
Passenger load factor jumped 3.6 percentage points on-year to 81.1 per cent in October.
SIA added that the airline will continue to make appropriate adjustments where necessary to better match capacity to forward demand.
- CNA/sc
