Asian carriers cutting jobs


The global economic downturn is starting to translate into capacity and airline job cuts in Asia.

This week Singapore Airlines announced that it would be decommissioning 17 of its aircraft and cutting capacity by 11%.

Seventeen aircraft is a significant proportion of the airline’s total fleet, which currently stands at a little over 100 aircraft.

SIA has yet to disclose which aircraft will be withdrawn but has said before that the first to be phased out will be the Boeing 747-400s and older Boeing 777s.

The Star Alliance carrier has also announced it has entered into negotiations with unions in Singapore to discuss getting employees to accept measures such as early retirement, no pay leave, shorter work months and accelerated clearance of leave.

Many of the airline’s employees already work on rosters and earn a significant proportion of their pay from allowances linked to flight hours.

The fact SIA plans to have fewer flights means many SIA employees are already experiencing a pay cut.

But what may be of more concern to the employees is the fact the airline – in its statement this week – flagged the prospect of job cuts.

“We will only contemplate retrenchment as a last resort but we do not have the luxury of time and we need to agree and act on some measures quickly so that we can push back the point of retrenchment as soon as possible and improve our chances of avoiding it altogether,” SIA says.

The Singapore Government’s investment arm Temasek Holdings has majority control of SIA and the Government has made it clear to companies that it wants firms to use job cuts as a last resort.

SIA’s remark that it will only use job cuts as a last resort is in line with the government mantra but it also means SIA is positioning itself for job cuts if the need arises.

The Singaporean carrier is not the only carrier flagging the prospect of job cuts.

Australian carrier Virgin Blue this week announced that it would be grounding five aircraft. Currently it has around 68 aircraft flying.

In its media statement, Virgin Blue says the cut in capacity “will impact up to 400 full-time equivalent positions at Virgin Blue” but “the company is exploring a range of initiatives to minimise headcount reduction.”

While Virgin Blue is stopping short of saying exactly how many jobs will be axed, a smaller Aussie carrier SkyAirWorld has already acted on this.

SkyAirworld, which is based in Brisbane, this week grounded three of its five aircraft and axed 40 positions out of a total of 120, citing the global economic downturn.

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