SIA Cut Pays After $307 million Quarterly loss( April to June’09)
Singapore Airlines (SIA) will cut staff pay by 10 per cent after unveiling a net loss of S$307 million (RM736.8 million) in the April-June quarter — only its second-ever quarterly loss. It had recorded a net profit of S$358.6 million in the same quarter last year.
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Details:
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1.      The pay cuts, set to affect an estimated 12,000 staff,
2.      The cut is based on a formula linked to losses agreed with staff unions.
·        Under agreements that SIA has signed with its three unions, staff pay can shrink by between 2.5 per cent and 10 per cent if the airline reports an operating loss of at least S$50 million in any quarter. All of the monthly variable component (MVC), which makes up 10 per cent of an employee’s total pay will gets cut if losses exceed S$200 million, which is now happening in this case.
·        The MVC cut will be effective for three months. For new cabin crew, who earn a basic salary of S$1,300 a month, for example, the cut amounts to about S$130. Top management, who are already earning between 10 per cent and 20 per cent less, with effect from this month, will not be subjected to more cuts
·        Interesting, the Presidents of the Air Line Pilots Association-Singapore and SIA Staff Union, Captain P.James and AlanTan respectively took it very positively as they believed by shaving of the pay at least jobs can be saved.
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With the staff pay cut, as well as the new MVC cuts, it will save it an estimated S$60 million for SIA in the current financial year.
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About SIA:
1.      Listed in 1984, it has never posted a full-year loss except for a quarterly loss of S$312 million when SARS hit in 2003.
2.      Presently, its  cash balance remains strong and no forecast to raise capital
3.      Latest Quarter end-June  Financial Performance:
·        SIA’s revenue fell 30 per cent to S$2.87billion in the three months to end-June compared to previous year were greatly impacted by both the economic slump and the H1N1 flu outbreak, as well as the cost of hedging fuel.
·        Expenditure was down 15.8 per cent to S$3.19 billion, but in the end, the group recorded an operating loss of S$319 million, against a profit of S$343 million last year.
·        The parent airline alone — excluding SilkAir and SIA Cargo, as well as subsidiaries SIA Engineering and Singapore Airport Terminal Services (Sats) — suffered a quarterly operating loss of S$271 million.
·        Losses per share for the quarter were 26 cents, down from earnings per share of 30.3 cents a year earlier. Net asset value per share grew fell slightly to S$11.76 as at June 30 from S$11.78 as at March 31.
·        SIA shares closed 18 cents higher at S$13.52 yesterday
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July 30, 2009
Posted in: Government Linked Companies(GLC), Performance Mgmt, Singapore
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