Singapore Airlines has reached a deal with its pilots' union on a no-pay-leave scheme that will allow it to proceed with company-wide cost-saving measures.

Under the deal with the Air Line Pilots Association - Singapore [Alpa-S], all SIA pilots will take one day no-pay leave each month and a pay cut of 65% of one day's pay, pro-rated from monthly basic salary. The deal will take effect on 1 July.

"The agreement augments a series of measures taken by SIA to mitigate the burden of cost of excess staff resources resulting from the global business downturn," the airline says in a statement.

The Star Alliance carrier said in early April that it had in-principle agreements over no-pay leave with its other staff unions. These, however, were contingent on an agreement being reached with the pilots as well.

Singapore's Ministry of Manpower had to mediate between ALPA-S and SIA after they initially failed to reach an agreement. In May, under an interim deal, the pilots agreed to take a day no-pay leave while a final deal was being negotiated. SIA says that it has surplus pilots due to a sharp cutback in flights as demand for air travel fell over the last year. In the year ending March 2010, the airline plans to decommission 16 aircraft and reduce capacity by 11% from the previous year.

Senior management went on a shorter work month in April, and all ground personnel, cabin crew and administrative officers joined the scheme in May. From July 2009, all management staff in SIA will also take a pay cut and directors on the airline's board will have a 20% cut in their fees. Nearly 2,000 employees have also signed up for a scheme in which they could take up to two years no-pay leave.

"Altogether, these measures will save an estimated S$21 million [$14 million] in costs for the current financial year," says the airline. "SIA is grateful to its employees and the staff unions for their understanding and support."

SIA said in May that in the year ending 31 March, its net profit fell 48% to S$1.06 billion from a year before.

Source: Air Transport Intelligence news