Members of the management of SIA and its major subsidiary companies will experience salary reductions of between seven and 15 per cent with effect from October as part of the Group`s efforts to contain costs.
The deputy chairman and chief executive officer of SIA, Dr Cheong Choong Kong, will take a cut in his basic pay of 15 per cent. Other executive staff in the senior vice president rank and above will receive a basic pay cut of 10 per cent. Other staff in the management levels will take a basic pay cut of seven per cent.
SIA management is holding discussions with the unions about wage cuts for bargainable staff.
Because of SIA`s variable wage structure, where a significant portion of employees` income is derived from profit sharing bonuses, which last year amounted to the equivalent of 4.54 months of basic pay (on top of a separate gratuity of 1.65 months), the total reduction in the wage bill and the loss of income for staff will be far greater than the basic wage cuts of seven per cent to 15 per cent.
Directors on the boards of SIA and its major subsidiaries have also offered to take a 30 per cent cut in their directors` fees.
In an address to staff on 20 September, Dr Cheong said that the current global circumstances meant employees and unions may be called upon to make sacrifices.
The international airline industry, already impacted by a global economic slowdown since the beginning of the year, has been devastated by a loss of public confidence after the September terrorist attacks in the United States. SIA has recently announced reductions in some frequencies and is continuing to review its operating patterns in light of a decline in forward bookings.