Singapore Airlines (SIA) has announced that it is offering its cabin crew an option of either early release or retirement in order to further cut costs and reduce the impact of the COVID-19 pandemic.
A spokesperson from SIA said on Wednesday (12 August) that the COVID-19 Voluntary Release Scheme is also open to flight attendants who are on probation, and will come with payouts and benefits.
However, this scheme is not applicable to trainee crew members.
The spokesperson explained that the scheme was first established in view of the adverse impact of the pandemic as well as a “slower projected trajectory recovery for international air travel”.
Cabin crew members from both SIA and SilkAir who are interested to apply for the scheme, they can do so until the end of the month (31 August).
“Applications are subject to approval and cabin crew who apply for the VRS will be informed on the outcome of their application by mid-September,” the spokesperson said.
The spokesperson also noted that all the applications will be considered on its merits, and SIA will also look into operation requirements in its review of the applications.
Based on the notice sent to all cabin crew members on Wednesday, the airline said that the terms and benefits under the scheme will be decided by SIA and Singapore Airlines Staff Union.
“We continue to work closely with our unions on the way forward where staff measures are concerned. We will announce any additional measures, if necessary, at the appropriate time,” the spokesperson said.
The notice also stated that cabin crew members will receive different benefits based on their employment status and contract with the company.
As for those who are still serving their bonds as of 1 August, they can have their outstanding bond repayment waived if their application for an early leave is approved, the notice read.
It added that cabin crew members will also have any of their outstanding settling-in loans waived, and be given notice pay-in-lieu in accordance with their basic salary at the point of them leaving the company, the notice said.
Cabin crew who are on probation will receive one month’s basic salary whereas confirmed crew will get three months’ salary.
On the other hand, cabin crew members who are serving their last year of their contract are entitled to receive pro-rated gratuity without the need to complete their current contract. The amount ranges between S$4,000 and S$20,000, and this depends on their rank and how many contracts they have had with the airline.
The COVID-19 pandemic has badly affected the aviation industry as demand for travelling dipped due to travel restrictions and border closures.
Based on SIA’s 2020 outlook, the company suffered a staggering 99.6 per cent decline in passengers in its second quarter compared to the previous year. This shows just how badly the pandemic has impacted one of Singapore’s biggest sector.
In a Channel NewsAsia op-ed (12 August), Bendan Sobie of an independent aviation consulting and analysis firm Sobie Aviation, predicted that passenger traffic will likely remain around 1 percent of normal levels until travel bubbles are established beyond essential business travel and once tedious restrictions are lifted as these greatly supress demand.
In fact, the International Air Transport Association, which represents nearly 290 airlines consisting of 82 per cent of global air traffic, predicted that it expects air traffic to only return to pre-crisis levels in 2024.
Given how hard the industry has been hit, SIA has come up with numerous cost-cutting measures to ease the impact, including pay cuts and no-pay leave.
In May, SIA recorded its first annual net loss in its 48-year history. Just last month, the company reported a S$1.12 billion net loss for its first quarter performance.
On Monday, SIA stated that more than 6,000 of its 27,000 staff would opt for no-pay leave in order to help the airline deal with the impact of the pandemic.
If that’s not all, the airline has also slashed the pay of all its staff by 10 per cent, with senior vice-presidents taking a pay cut of 30 per cent.