As the virus continues to kill air travel, Singapore Airlines Ltd. has announced a reduction of 20% on its entire workforce, leading to a redundancy of 4300 jobs, this encompasses Singapore Airlines, Scoot and SilkAir. However, these cuts may affect only 2400 existing employees and the rest are mitigated by about 1900 new recruitments that were put on hold in March, the company is also in the process of facilitating early retirement schemes for pilots and ground staff, and said they will “finalize arrangements for the affected as soon as possible.” The last time Singapore Airlines cut jobs was during the SARS outbreak in 2003.
In an announcement, CEO Mr. Goh Choon Phong said, “The next few weeks will be some of the toughest in the history of the SIA Group”, as “Having to let go of our valuable and dedicated people is the hardest and most agonizing decision that I have had to make in my 30 years with SIA.”
SIA’s passenger demand fell by 99.5% in the first quarter and as of today it is only flying 7% to 8% of its pre-covid 2019 capacity with hope to increase it to 11% by November. While the governments’s support expired in August 2020 and got replaced by a subsidy package till March 2021, SIA had already raised $8 billion by means of loans and rights issue earlier and is now moving in with a strategy to operate under 50% of capacity flights until March 21 as they expect a full recovery only by 2024.
Goh himself has taken the highest salary cut in July comprising of 35%, while cuts in the company varied between 10% to 30% . Goh said “This is not a reflection of the strengths and capabilities of those who will be affected, but the result of an unprecedented global crisis that has engulfed the airline industry” and “Relative to most other major airlines in the world, the SIA Group is in an even more vulnerable position. This is because we do not have a domestic market which, as demonstrated in many countries, is the first to see a recovery in air traffic.” Due to Covid, Singapore Airlines shares are down by 45% so far, however there was little or no impact on their shares post the job redundancy announcements.
They have also deferred their aircraft orders with Airbus and are in conversation with Boeing for the same.