Singapore Airlines, hobbled by the near disappearance of international and business travel, bowed to reality and said it would eliminate 4,300 jobs. Of these 2,400 will be lay offs and furloughs, with the balance accounted for through attrition, retirements, and a hiring freeze for open positions.
Singapore expects to operate less than 50% of its pre-pandemic network for this year and next and said it doesn’t forecast a return to pre-pandemic traffic until 2024, tracking with the International Air Transport Association’s forecast. “Given that the road to recovery will be long and fraught with uncertainty, we have to unfortunately implement involuntary staff reduction measures,” Singapore CEO Goh Choon Phong said in a statement.
These are the first layoffs or furloughs Singapore has announced since the pandemic began. The carrier entered the crisis in a relatively strong position financially. After the pandemic began to affect air travel, the airline took early and aggressive action. It raised billions in cash and credit, and has been proactive in parking aircraft and pulling capacity out of its network. In addition, Singapore’s government allocated $13 billion in aid for the airline, among the most lavish government aid packages to any airline in the world.
But all of this wasn’t enough. Singapore is in a particularly bad spot to take advantage of any recovery in the airline industry. It has no domestic market at all. Airlines that are beginning to recover benefit from large domestic markets, like those in the U.S., Russia, China, Australia, and Brazil, to cite a few examples. Even airlines based in small European countries have a relative advantage, given that they can operate within the European Union.
Singapore is hamstrung by the patchwork of international travel restrictions throughout Asia and the world. In addition, the mainline carrier staked much of its success on premium business travelers, a market that has all but evaporated. The carrier explained its reductions like this: “In order to remain viable in this uncertain landscape, the group’s airlines will operate a smaller fleet for a reduced network compared to their pre-Covid operations in the coming years.”
Singapore is beginning negotiations with its unions on the job cuts, the carrier said. The 2,400 layoffs and furloughs will be both in Singapore and at its stations around the world. “This is not a reflection of the strengths and capabilities of those who will be affected, but the result of an unprecedented global crisis that has engulfed the airline industry,” Goh said.
