SINGAPORE (Apr 2): SIA Engineering (SIAEC) is ramping up its cost saving measures as the global economy grapples with an unprecedented collapse in demand for air travel due to the Covid-19 outbreak.
In light of a combination of massive flight cuts by airline customers and an increasingly difficult business environment, the management of SIAEC is set to take deeper pay cuts than the previously announced range of 5-12%.
In March, the group reported that the CEO and executive vice president will take the lead with a pay cut of 12% and 10% respectively with effect from Mar 15, while senior vice presidents and vice presidents will see their salaries axed by 8% and 7% respectively from Apr 15.
Senior managers and managers were not spared either, taking a cut of 5% with effect from May 15.
As things take a turn for the worse, these measures have been revised with the group scrambling to mitigate the impacts of the worsening virus outbreak.
The revisions will see the CEO and executive vice president take pay cuts of 25% and 20% respectively with effect from Apr 1, while the pay cuts for senior vice presidents and vice presidents have been brought forward to Apr 1 and are slated to increase to 15% and 12% respectively from May 1.
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Senior managers and managers, too, will see their pay cuts of 5% brought forward to Apr 1, and are set to increase to 10% from May 1.
Although significantly deeper, the cuts are not about to stop. In light of the worsening situation, the SIAEC Board has also volunteered a deeper reduction of 25% in fees accruing with effect from Apr 1 in solidarity with its management and staff.
In addition to the previously announced voluntary no-pay leave scheme offered to all staff, SIAEC says that it has been working closely with its unions on other measures, including varying days of compulsory no pay leave, furlough for staff on re-employment contracts and deferment of salary increments and promotions
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“The SIAEC group will defer non-essential operating costs, non-essential capital expenditure and timing of certain payments,” says the group.
“We will also take measures to maintain adequate liquidity over the uncertain duration of this unexpected crisis and severe disruption,” it adds.
As at 1.18pm, shares in SIA Engineering are trading two cents lower, or 1.21% down, at $1.63.
