Singapore Airlines (SIA) plans to cut 17 aircraft from its fleet in the coming fiscal year and the airline's management met with unions today to warn that this will result in some redundant resources.
"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 in a statement today.
It says management met with three employee unions today to discuss measures such as voluntary retirement, shorter work months, accelerated clearance of leave and leave without pay.
"If there are to be cuts in salary, the management will be the first to take them," it adds.
SIA says the market is shrinking and it has to cut capacity but as a consequence there will be redundant resources.
The falling demand for travel is reflected in forward bookings, it adds.
SIA says in the April 2009 to March 2010 fiscal year it will cut capacity by 11%. It previously said it expected growth of 1%.
It also says during the fiscal year 17 aircraft will be "decommissioned" whereas before the economic downturn it was planning to remove four aircraft from service.
An SIA spokesman was unable to say which aircraft will be decommissioned. But SIA has said previously that it will be the Boeing 747-400s and older Boeing 777s that will leave the fleet first.
CEO Chew Choon Seng says in today's statement: "We have to face the reality that 2009 is going to be a difficult year."
He adds: "We have to act decisively to address the situation" and are determined to have capacity that will "enable the airline to be viable in a shrinking market".