Covid-19: SIA announces cost-cutting measures affecting 10,000 staff; CEO, other bosses to take larger pay cuts

SINGAPORE — About 10,000 staff at national carrier Singapore Airlines (SIA) face cost-cutting measures including voluntary no-pay leave for most staff, varying days of compulsory no-pay leave every month for pilots, executives and associates, as well as a leave of absence — or furlough — for staff on re-employment contracts.

“This is the greatest challenge in the SIA’s Group’s existence,” chief executive officer Goh Choon Phong stated in an internal staff memo seen by TODAY. Airlines around the globe have been devastated by the dramatic reduction in air travel amid the Covid-19 outbreak.

The SIA management team will also take deeper pay cuts than previously announced, with Mr Goh’s base salary to be cut by 30 per cent, up from the 15 per cent cut that SIA announced late last month, the memo stated.

In a disclosure of the company’s director’s remuneration package which had previously been made public, Mr Goh’s base salary for the 2018/2019 financial year was close to S$1.4 million, not including additional payments such as bonuses.

In the memo, Mr Goh said that the airline’s management had “reached agreements with our unions for a set of cost-cutting measures”.

“Your division and department heads will brief you on the measures and Human Resources will send more details tomorrow (Tuesday),” he wrote to staff.

Earlier on Monday, SIA had announced that it will cut 96 per cent of the flight capacity that had been originally scheduled up to the end of April, as border controls tighten worldwide due to the Covid-19 outbreak.

As a result of that, the national carrier said that it would be grounding 138 SIA and SilkAir planes, out of a total fleet of 147.

In his memo, Mr Goh said that his base salary will be cut by 30 per cent with effect from April 1. Those who hold the positions of executive vice-president (EVPs) and senior vice-president (SVPs) will have their pay cut by 25 per cent and 20 per cent respectively.

And from May 1, the pay cuts for those who hold the position of divisional vice-president (DVPs) and vice-presidents (VPs) will increase to 12 per cent — up from the 7 per cent that was initially announced.

Mr Goh added that the pay cut of 5 per cent for senior managers and managers which had previously been announced in February will be brought forward to April 1, and will then increase to 10 per cent from May 1.

At the same time, Mr Goh said that SIA’s Board members have “decided to take a 30 per cent cut in their fees” in solidarity with the company.

In his memo to staff, Mr Goh added that they must all “brace for even greater sacrifices going forward”, given the uncertainty over how long the Covid-19 pandemic will ground SIA’s operations.

But he said that the company has to find “impactful ways to restructure (their) work and increase productivity”.

“We need bold and creative solutions to further bolster our competitive edge,” said Mr Goh, adding that SIA had to be ready to pounce on every opportunity “at the first signs of recovery and soar once again”.

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