SINGAPORE - Faced with crew overcapacity amid challenging market conditions, Singapore Airlines (SIA) is jettisoning most of its expatriate pilots.
The airline said on Wednesday that it was releasing 76 pilots ahead of the expiry of their fixed-term contracts. It had previously said it would be releasing pilots only upon expiry of their contracts. Now the pilots are expected to be released by June 30.
The airline said it would assist these pilots "to pursue employment opportunities within the SIA Group and with other airlines".
SIA blamed the current surplus of pilots on the lingering effects of the global financial crisis of 2009-10, which had resulted in excess capacity and slower-than-expected growth.
"The airline had earlier implemented other measures to address the surplus, such as voluntary no-pay leave and the suspension of cadet pilot recruitment," it said. "Pilots employed on fixed-term contracts make up about 4 per cent of Singapore Airlines' total pilots' workforce."
Pilots on local terms are unaffected - for now.
Mok Hin Choon, president of the Air Line Pilots Association of Singapore, said the decision had caught him by surprise.
"It is a sad day," Captain Mok said. "We were earlier led to believe that these pilots would be allowed to run down their contracts. This came out of the blue, and obviously something has changed."
He added that his union would seek more clarification on the exact situation the company was facing in terms of crew surplus. Meanwhile, he noted that the morale among pilots was down.
SIA has a fleet of about 100 planes, and about 2,300 pilots, including about 80 on contracts.
It last released contract pilots in 2003.
In 2009, following the global financial crisis, SIA implemented measures such as requiring pilots to take a day off each month, a company-wide voluntary no-pay leave scheme, and compulsory no-pay leave for pilots. It also slowed down its cadet pilot training programme.
The latest move comes in response to increasingly challenging operating conditions for many carriers, particularly premium long-haul carriers.
Over the past year, SIA has responded by rationalising routes, tying up alliances and growing subsidiary companies.
But it now finds itself with more pilots than it needs. By some accounts, the company has a surplus of almost 300 junior pilots and 100 captains.
SIA suspended hiring of cadet pilots in March last year, and has cut flying hours for junior pilots. All pilots have also been offered voluntary no-pay leave.
While market conditions are largely to blame, part of the crew overcapacity has been caused by the delivery delays for its new A350 and B787 planes.
Also, the airline has pulled the plug on some services, while growing others and boosting its regional subsidiaries. For example, some 60 pilots are affected by SIA's decision to pull out of its Singapore-US nonstop A340-500 services.
But some pilots BT spoke to said the airline could have managed its crew capacity situation more proactively.
For example, they said, it could have redeployed pilots to helm the B777-200 fleet of its low-cost long-haul carrier, Scoot. Instead, Scoot first started hiring new pilots from outside. Each of the twin-aisle planes requires 10 pilots.
With SIA continuing to restructure its operations, the issue of managing crew numbers will continue to be a thorn in its side for the foreseeable future.
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