Singapore Airlines said it had asked its pilots to volunteer for unpaid leave for up to two years as it struggles with a slowdown in the aviation sector.
SIA's offer to pilots below the rank of captain comes after it last month said profits had fallen by more than half in the final quarter of 2011 due to rising fuel costs, and weakening passenger and cargo demand from Europe.
The call, which will allow the pilots to join SIA's rivals, was made to "help address a temporary surplus of senior first officers, first officers, second officers and cadet pilots," spokesman Nicholas Ionides told AFP on Friday.
He stated that SIA was "not able to provide specific targets for how many pilots may take up the offer" as it was a voluntary scheme.
Despite the move, Ionides said SIA has no plans to reduce flights and downsize its operating fleet in the near term.
The announcement comes as the global industry is hit by soaring fuel prices and low demand.
The International Air Transport Association in November cut its forecast for the sector's profits this year by a quarter to $3.5 billion, but warned of losses of more than $8 billion if the global economy suffers another downturn.
SIA announced net profit plunged 53 percent year on year to Sg$135.2 million in the October-December quarter, while it said last week it would raise fuel surcharges by up to $28.
About half of SIA's 2,335 pilots were not of captain rank as of 31 March last year, SIA's 2010/2011 annual report stated.
"To the question of why we are offering the scheme, the global financial crisis in 2009-10 was a factor and resulted in some excess capacity at the time. Growth was also slower than anticipated after that," Ionides added.
"We view the resultant surplus pilot situation as temporary, and are therefore managing this by introducing the voluntary scheme."
SIA did not halt pilot recruitment and training during the financial crisis as it takes three years to train a first officer, resulting in the current pilot surplus as the aviation sector struggled to take off, Ionides said.
Pilots who take up the offer will be allowed to work for other airlines, including SIA's long-haul budget carrier arm Scoot, which will begin flying by the middle of this year. SIA also owns almost 33 percent of budget carrier Tiger Airways.
"Should there be positions available at Scoot, pilots on voluntary no-pay leave may apply for them," he said.
However, if the pilots were to join a rival carrier they could find themselves starting at the bottom of the ladder while the fact they would only be available for two years at most might work against them.
Captain P. James, president of the Airline Pilots Association Singapore, questioned why pilots were being asked to go on leave when there's a need for them in other airlines with the SIA Group.
"We can understand that there's a downturn but what we cannot understand and cannot accept is why pilots are being asked to go on leave where there's a need for them in other airlines within the group," James told the Straits Times.
SIA shares were slightly down in early trade, shedding 0.37 percent to Sg$10.85 as of 0215 GMT.
-- Dow Jones Newswires contributed to this story --
VOLUNTARY NO PAY LEAVE (VNPL) FOR SENIOR FIRST OFFICERS, FIRST OFFICERS, SECOND OFFICERS AND CADET PILOTS
The capacity cuts during the 2009-2010 economic downturn and the persistent weak market conditions thereafter have resulted in a pilot surplus situation, especially with regard to First Officers. Even though we reduced Cadet Pilot recruitment when the economic downturn occurred, we had to carry the surplus Cadet Pilots who were recruited earlier, as Cadet Pilots are recruited on a 3-year lead-time basis. The VNPL scheme will allow staff to take leave for personal reasons and also help the Company manage excess manpower.
2 The voluntary no-pay leave scheme is now being offered as a means to ameliorate the excess crew situation. The situation of excess First Officers is particularly acute on the B777 fleet. The scheme is open for application from now to 31 March 2012.
3 The VNPL shall be for a continuous period of 1 week up to 2 years.
4 The conditions for the VNPL are in Annex 1 and the FAQs are in Annex 2.
5 Those who wish to apply may submit their requests via e-mail, as follows:
Senior First Officers/First Officers :
Second Officers :
Cadets :
6 Applications submitted after 31 March 2012 would not qualify for the
VNPL benefits, and would be treated as normal no-pay leave.
7 Dialogue sessions have been planned to address any queries you may have.
The date and venue will be posted on Waves.
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VOLUNTARY NO PAY LEAVE (VNPL) FOR SENIOR FIRST OFFICERS, FIRST OFFICERS, SECOND OFFICERS AND CADET PILOTS
The following conditions will apply under the scheme:
1. APPLICATION WINDOW
This Voluntary No Pay Leave scheme is open for applications from now till 31 March 2012.
2. DURATION OF NO PAY LEAVE
The no pay leave shall be for a continuous period of 1 week up to 2 years.
3. ELIGIBILITY
This Voluntary No Pay scheme is open for applications from Senior First Officers, First Officers, Second Officers and Cadet Pilots. Applications will be subject to approval, taking into account operational requirements and, for Second Officers, your stage of training.
4. CLEARING OF ANNUAL LEAVE
The employee should clear any annual leave earned up to the start of his no pay leave period.
5. EMPLOYMENT OUTSIDE THE COMPANY
Employment outside of the Company is permitted subject to the prior written approval of the Company.
6. SUSPENSION OF TERMS AND CONDITIONS OF SERVICE
The employee shall not enjoy any of his current terms and conditions of service during the no pay leave period. The following exceptions would however be granted:
(i) The employee will be allowed to avail himself of concessional travel during the period of no pay leave. In addition, he will be allowed to use any privilege ticket, which has been earned but not yet used, provided it is used within its validity period.
(ii) Outpatient medical and dental benefits under the Company’s scheme will apply if the aggregate of your no pay leave is less than 30 calendar days per year. If the aggregate of your no pay leave is 30 calendar days or more in a year, the outpatient medical and dental benefits will only apply for the first aggregate of less than 30 calendar days.
7. PAYMENT OF SERVICE INCREMENT, BONUS (IF ANY), ANNUAL WAGE SUPPLEMENT, LEAVE ENTITLEMENT, ETC
The period of no pay leave will not be counted for any payments or leave entitlements if the aggregate of no pay leave taken adds up to 30 calendar days or more in a year.
8. MONTHLY FIXED ALLOWANCES
All monthly fixed allowances (as applicable) shall be pro-rated to take into account the period of no pay leave.
9. LENGTH OF SERVICE
No pay leave in the aggregate of 30 calendar days or more in a year will not count towards service with the Company.
10. INCOME TAX CLEARANCE (FOR NON-SINGAPOREANS)
If your no pay leave period is more than 3 months, the Company will withhold payment of monies due to you for the month prior to the commencement of your no pay leave until you have obtained tax clearance from the Inland Revenue Authority of Singapore (IRAS). Payrolls Department will therefore be submitting the IR21 form to IRAS for your tax clearance one month prior to the No Pay Leave period. Should you have any queries, please contact Payrolls Department.
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FREQUENTLY ASKED QUESTIONS
A What is the reason for implementing VNPL?
�� The capacity cuts during the 2009-2010 economic downturn and the persistent weak market conditions thereafter have resulted in a pilot surplus situation, especially with regard to First Officers. Even though we reduced Cadet Pilot recruitment when the economic downturn occurred, we had to carry the surplus Cadet Pilots who were recruited earlier, as Cadet Pilots are recruited on a 3-year lead-time basis. The VNPL scheme will allow staff to take leave for personal reasons and also help the Company manage excess manpower.
B Can I apply for VNPL in blocks of say 1 week per occasion over a period of 3 or 4 months, or in some other combination, rather than a full stretch?
�� Yes you can do so, subject to approval.
C How do I apply for the VNPL?
��
D How do I apply for alternative employment while on VNPL?
�� If you wish to take up outside employment during VNPL, whether part-time or full-time, please send an email to your Chief Pilot, copied toFLT_HRA@singaporeair.com.sg stating the following:
o Your Staff Number.
o Your name.
o The alternative employer’s company name.
o The alternative employer’s nature of business.
o The job/title/position you will hold in the other company.
o Your duties in the other company.
o The period of the alternative employment (from and to dates).
�� You will be informed by DSD (Crew HR Admin) if your application is approved.
E What are the general guidelines on the approval of alternative employment during VNPL?
�� Factors of whether there will be a conflict of interest will be taken into account.
F Will there be conflict of interest if I work for another airline?
�� The Company will assess your job duties to determine whether there is conflict of interest.
G If I take up alternative employment with another airline, the minimum engagement period may be 3 years.
This exceeds the 2-year maximum period stated in the VNPL Terms & Conditions. Will my VNPL application for 3 years be approved?
�� For as long as manpower strength continues to be surplus to operational needs, applications for a 3-year VNPL period will be considered favourably for this purpose on a case by case basis.
H If I take up alternative employment with another airline, will my flying hours and sectors be recognised?
�� Yes, your hours and sectors will be recognised up to the maximum limits stated in the CAM for flying experience outside SIA as follows:
o Hours - maximum limit of 230 light aircraft hours, and 2,500 hours on aircraft exceeding 5,700 kg. all-up weight.
o Sectors - maximum limit of 500 sectors and 165 P1 U/S sectors on aircraft exceeding 5,700 kg. all-up weight.
I If I take up alternative employment with another airline, will my seniority be affected and will my VNPL period count towards years of service with SIA?
�� Your seniority in the company will not be affected. However, your VNPL period will not count towards years of service with SIA, and therefore all benefits and payments based on years of service will be pro-rated, such as Service Increment, Bonus, AWS, leave entitlements, etc.
J If I take up alternative employment with another airline, will my VNPL period count towards service of my bond period?
�� Yes, the VNPL period will count towards service of the bond period. For example, for a pilot who has served 5 years of a 7-year bond before going on a 3-year VNPL period, the bond will be considered fully served upon return from VNPL.
K Will my Cadet Pilot Training Repayment Sum be waived if I go on VNPL?
�� No, it will not be waived. The Company will work with you towards the payment details.
L If I take up alternative employment with another airline, how will my performance during my VNPL be taken into consideration by SIA?
�� We will need to assess your performance based on existing SIA criteria, for both fields of technical competence and personal qualities, upon your return from VNPL. Criteria specifically for this purpose have yet to be developed but it will be formulated so as to make a suitable assessment of your performance.
M Can First Officers from all fleets apply?
�� Yes, but each application will be treated on a case-by-case basis, subject to individual fleet requirements. The current large excess of crew is predominately on the B777 fleet.
N Will the Company recall me while I am on VNPL, if the business picks up and additional manning is required?
�� If the Company requires you to come back before the end of the VNPL period, it will be on a basis of mutual agreement.
O If I am on VNPL and I am not able to respond to the early recall by the Company due to personal reasons (e.g. half way through a training course), will the company terminate my employment?
�� No, the company will not terminate your employment during VNPL.
P Will I be allowed to extend the VNPL beyond the 2 years period and if so, will it be on the same terms and conditions of current VNPL?
�� Extension beyond 2 years will normally not be permitted but if there are any unique circumstances, they can be considered separately.
Q Will I be allowed to cut short the VNPL and return to work before my originally approved VNPL end-date?
�� This will be assessed based on operational requirements.
R Will my dependents continue to be covered under the QBE dependents medical scheme while I am on VNPL?
�� You will continue to be covered by the QBE medical insurance scheme until the end of the medical insurance policy year. The annual QBE medical insurance policy year ends on 31 Aug 2012. Staff on VNPL may, if they so wish, renew their policy by paying the full premium charged by QBE to continue their insurance from 1 Sep 2012. When they subsequently return to work on completion of their VNPL, the Company will re-commence its subsidy of the premium from the date of their return to work.
S Will I continue to be covered under the Group Term Life Scheme and Personal Accident Insurance while I am on VNPL?
�� No. The GTLS and Personal Accident Insurance will be suspended for the period of the VNPL.
T Will I continue to be covered under the Loss of License Insurance while I am on VNPL?
�� No. The LOL Insurance will be suspended for the period of the VNPL.
U Must I surrender my Staff ID and SQ e-portal token before going on VNPL?
�� Yes, if your VNPL exceeds 3 months.
V How can I make use of the employee medical and dental benefits that I’m eligible for during the first 29 days of my VNPL if I do not have my Staff ID?
�� If your VNPL exceeds 3 months or more, you will be issued a Letter of Guarantee (in view that your staff ID will be returned to the Company), which you can use to identify yourself as an employee of Singapore Airlines at any SIA-appointed clinic. The Letter of Guarantee will cover you for the first 29 days of your VNPL.
W Without my SQ e-portal token, how do I apply for Staff Travel tickets while on VNPL?
�� Please email staff_travel@singaporeair.com.sg with the following information:
o Your staff number.
o Your name.
o Indicate that you are on VNPL.
o Indicate your seat bookings and ticketing needs.
X Will my paid childcare leave be pro-rated if my VNPL is approved?
�� If you are eligible for paid childcare leave, it will be pro-rated if your aggregated NPL for the calendar year is 30 or more days.
This isn't the first time SIA has done this. Question is, what if no one volunteers? What will they resort to doing? Just a few weeks ago, Transport Minister Lui Tuck Yew was talking up about aviation in Singapore, but it seems to be otherwise with the case of SIA.
Cadets and S/Os will feel the most vulnerable while F/Os will not want to stop working when they're getting paid fairly well for the job. Joining a rival airline like Jetstar Asia will be an option, but how many are willing to do it voluntarily?
