Citing a need to cut costs further as competition intensifies, the Singapore Airlines (SIA) Group is eliminating hundreds of jobs.

SIA launched its workforce reduction programme by unveiling plans to eliminate around 70 finance division jobs due to a decision to outsource some of its revenue accounting work.

The carrier, which has been working to cut costs since it was hard hit by the effects of the SARS outbreak for several months last year, is also planning to outsource IT infrastructure functions by the end of this year. It says the move will affect around 130 employees, who will be offered work with the outside company that it will not identify.

Ground handling and in-flight catering subsidiary Singapore Airport Terminal Services (SATS) has meanwhile laid off 108 employees and says it is sourcing out many more jobs as it prepares for new competition at its Changi International Airport base. In addition to the layoffs, an outsourcing programme will affect 1,064 employees in the company's handling and catering divisions. SATS adds that it already uses more than 2,000 contract workers, who make up 19% of its total workforce.

SATS is one of two handlers at Changi, the other being government-owned Changi International Airport Services, which is being acquired by the Emirates Group's Dnata unit. A third handler, Swissport International, is also being established at Changi after the Singapore government announced it would award another handling licence earlier this year to boost competition.

The SIA Group has around 29,000 employees. It has said cost-cutting efforts must be stepped up, particularly as the core airline is facing increased competition on short-haul routes from new low-cost carriers, and it has been seeking more favourable labour agreements with its workforce.

Last year, as the SARS outbreak was badly impacting its business, the SIA Group cut hundreds of jobs in its first major retrenchment exercise in around 20 years.


Source: Airline Business