SIA introduces voluntary no-pay leave for cabin crew

SINGAPORE — National carrier Singapore Airlines (SIA) is asking its cabin crew to go on voluntary no-pay leave (VNPL) for a period of three months starting in September to address a “temporary crew surplus situation”.

While the scheme was last rolled out during the global financial crisis in 2009, the flag carrier intends to offer it “from time to time, going forward”  to enable the airline to be “more flexible and nimble in managing crew resources”, an SIA spokesperson told TODAY.

SIA employs about 14,800 staff, of which 8,200 are cabin crew.

SIA Group, including SIA Engineering, SilkAir, SIA Cargo, Scoot and other subsidiaries, employ about 25,800 people.

The airline said the nature of its business is such that it may encounter short-term periods of manpower surplus or deficits at specific ranks as its network expands and contracts, depending on peak or lean travel seasons.

“The division will need to exercise flexibility and nimbleness to better manage crew resources. VNPL and the leave buy-back scheme are measures that the division will take from time to time to achieve this objective,” SIA said in a notice to its cabin crew sent out on Wednesday (Aug 3) announcing the introduction of the VNPL scheme.

The notice explained that given the temporary crew surplus situation, the cabin crew division will be introducing the VNPL option for Chief Steward/Stewardess (CS/CSS) and Flight Steward/Stewardess ranks (FS/FSS), so as to better manage crew resources and operational requirements.

SIA has four ranks of crew, in ascending order: FS/FSS, LS/LSS (Leading Steward/Stewardess), CS/CSS and IFM (In-Flight Manager), said a company spokesperson.

The airline spokesperson said the initiative is specific to the cabin crew division and no such scheme is available to employees at the other departments, and stressed that the scheme is entirely voluntary.

According to analysts, SIA has been under strong competitive pressure from other carriers in Asia and the Middle East.

The airline’s move to making operations a lot more flexible appears to be aimed at managing costs better.

“That means that during periods of low demand they will operate fewer flights in order to maintain their profit margins, resulting in some periods where they may have a surplus of operational staff.

“SIA’s new approach of flexing capacity up and down to match demand should deliver more sustainable profits, but does also mean some uncertainty for staff that may be asked to take short-term unpaid leave,” said Mr Ellis Taylor, Asia finance editor at FlightGlobal.

He also noted that SIA will ramp up capacity towards the end-of-the-year peak-travel season, given the VNPL offer is for a short period.

“SIA is being flexible rather than having to make structural changes, such as by offering redundancies,” Mr Taylor added.

The airline’s CEO, Mr Goh Choon Phong, said in June that jobs are likely to be cut as part of the airline’s business review to revive earnings following a surprise net loss of S$138 million in the fourth-quarter ended March 31 — its first loss in five years.

SIA had stated it would be taking “bold radical measures”, with a focus on enhancing cost and service efficiencies to better position the company for long-term growth.

In view of a challenging 2017, SIA also set up a dedicated transformation office to conduct a “wide-ranging review” to ensure sustainable growth.

Mr Taylor noted that VNPL is a tool that a number of other airlines use during the downturn.

For instance, almost all the United States carriers “furloughed” pilots and cabin crew after the 9/11 terrorist attacks, some of whom had to wait for years to get back to work with their airlines.