Airline Industry’s Key Players Seek Different Measures to Overcome Crisis
Airline industry is recovering from the pandemic slower than expected, and it might take until 2024 for the global air travel to flourish like the pre-pandemic time, the trade association for the airline industry claimed on Thursday.
Major airlines have been taking drastic steps to overcome the effect of the coronavirus pandemic. Singapore Airlines has announced some further steps to manage its costs. The airlines is set to cut pays of its management staff and deduct at least 10 percent from other employees’ salaries.
The airline will cut off the full quantum of the monthly variable component of salaries from Aug 1. “This amounts to 10 per cent of the basic salary for all staff below the level of manager”, said Singapore Airlines.
Singapore Airlines, one of the leading airline industry’s competitors, suffered a net loss of 1.12 billion Singapore dollars in the first quarter due to travel restrictions and the need to cut capacity amid the pandemic.
Basic salaries of managers and senior managers will be reduced by 12 percent, up from 10 percent, while vice-presidents and divisional vice-presidents will have to bear a cut of 15 percent, up from 12 percent. Senior vice-presidents and executive vice-presidents will get a 25 percent and 30 percent cut respectively, up from 20 percent and 25 percent respectively.
Singapore Airlines CEO Goh Choon Phong will also have his salary cut by 35 percent, up from 30 percent.
The airline is also offering a COVID-19 Special Early Retirement Scheme to employees aged 50 and above and with at least 15 years of service, up to the level of divisional vice-president.
“Given the slower growth trajectory and depressed market conditions, we must brace for additional staff measures. We will be engaging our staff unions on this and will announce the measures when they have been firmed up. Our immediate priority is to do everything we can to survive this crisis and be ready for the long trudge ahead of us,” Goh said.
Airline industry has been hit the hardest with the onset of the pandemic. Last month, Airbus announced to cut 15,000 job globally – which is almost 11 percent of its total workforce.
On Thursday, Air France-KLM revealed a second-quarter loss of 2.6 billion euros due to grounded flights amid the pandemic. The Franco-Dutch airline group said that the twin airlines must “significantly reduce” the workforce.
Compared to last year, “activity levels were close to zero in April and May 2020,” the group said. “Nevertheless, there is limited visibility on the demand recovery curve as customer booking behaviour is much more short-term oriented than before the Covid-19 crisis, especially on the Long Haul network.”
Earlier in July, Air France had announced to sack 7,580 employees from it airline and its regional unit Hop! by the end of 2022. The airlines is expected to benefit from seven billion euros in French loans either from or backed by the state along with an expected two to four billion euros in aid from the Dutch government.
Recently, the Dutch government had approved 3.4 billion euros for KLM. Similarly, Germany’s Lufthansa is set to receive nine billion euros from Berlin to save itself from going bankrupt.
However, the bailout amount being provided by the European governments comes with the condition that these major airline industry operators will become greener by reducing carbon emissions, using more modern aircraft and cutting domestic routes.
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