Wages of aviation workers to be supported by up to 50%: Transport Ministry

• A new S$330 million government grant will be disbursed to give wage support for aviation workers 
• The move is designed to help the hard-hit aviation sector maintain domestic capabilities 
• Another S$540 million will extend cost relief for aviation firms 
• The grants are part of a targeted support package for the air transport industry as announced during Budget 2021

SINGAPORE — To prevent further loss of capabilities in the aviation sector, the Government will pay up to half the salaries of aviation workers under a new Aviation Workforce Retention Grant, the Ministry of Transport (MOT) said on Wednesday (Feb 17).

This S$330 million scheme adds on to earlier wage support schemes that the hard-hit industry has already been receiving from the Government, and helps the industry players retain manpower that is essential for the restart of global air travel.

In a statement, MOT said that many aviation companies have reduced their headcounts over the past year in a judicious manner, which mostly affected foreign manpower.

“We must avoid further reductions to the aviation workforce so that companies will not lose their core local capabilities, which has taken many years to build up. If the sector weakens its capabilities, this will hamper its ability to recover,” the ministry added.

Transport Minister Ong Ye Kung said that the move aims to help the Changi air hub tide through the Covid-19 crisis.

“Aviation is one of the hardest hit sectors during this pandemic, if not the hardest hit, as Changi and its stakeholders have lost 97.5 per cent of its customers. Yet for a city-state like Singapore, the air hub is essential to connect us with the rest of the world and continues to be our lifeblood.”

More details of the package will be revealed during the debate into his ministry’s budget, which is scheduled between Feb 24 and March 8.

WHAT IS IT?

Companies whose activities are based at Changi Airport will automatically receive the Aviation Workforce Retention Grant, which tops up their wage support by up to 50 per cent.

These companies would have already been receiving the highest tier of support under the Jobs Support Scheme, which grants them 30 per cent wage support from April to June this year, and 10 per cent wage support from July to September.

With the new grant, companies will receive another 20 per cent of the first S$4,600 of gross monthly wages for every resident employee from April to June, and an additional 40 per cent of the first S$4,600 of gross monthly wages from July to September.

These companies will thus receive two payouts in September and December this year for these two tranches respectively.

The programme forms part of the S$870 million OneAviation Support Package, which was announced in the latest Budget statement on Tuesday by Deputy Prime Minister Heng Swee Keat.

The remaining S$540 million will be used for cost relief, which will extend the existing rebates on fees and charges at Changi and Seletar Airport, as well as other licence and medical evaluation fees for workers by another year.

WHY IS THIS NEEDED?

The move is needed to help maintain capabilities in the aviation sector, which continues to be adversely affected this year.

As of the end of last month, the total passenger traffic in Changi Airport was only around 2 per cent of pre-pandemic levels. Comparing the January operating results of Singapore Airlines (SIA) in 2020 and 2021, the flag carrier is transporting around 97 per cent fewer passengers this year than a year ago.

Mr Lee Seow Hiang, chief executive officer of Changi Airport Group, said: “While the successful development and global distribution of Covid-19 vaccines offer promise for the aviation sector, we foresee that air travel demand is unlikely to return to pre-Covid-19 levels in the near-term as countries around the world continue to maintain tight border controls.”

Although the recovery in global air travel may take some time, the capabilities and experiences of the aviation workforce, which have taken decades to build, will be needed for the eventual restart when it happens.

The viability of Singapore as an air hub is also vital to the country's economic future.

However, aviation firms have continued to cut manpower over the past year due to the pandemic. Last September, SIA slashed around 4,300 positions, which was estimated to affect around 2,400 employees after taking into account measures such as early retirement schemes and a voluntary release scheme. The loss of headcount was later trimmed to 2,000.

Just like the Jobs Support Scheme, the new grant will help resident employees retain their jobs. They will also receive help with skills training through an enhanced training support programme until December this year.

MOT said: “On top of this, Singapore-based airlines will receive support to convert some of their existing pilots to operate other aircraft types, to provide an adequate pool of trained pilots to support the eventual recovery.”