Singapore Airlines Ltd, the world's second-largest carrier by market value, said on Friday it has asked its pilots to volunteer for a no-pay leave of up to two years as the industry was hit by weak demand and soaring jet fuel prices.
The move comes on the heels of a 53 percent plunge in third-quarter net profits for the Singapore flag-carrier, which recently also announced a 20 percent capacity cut for its cargo operation and higher fuel surcharges.
The offer is open to senior first officers, first officers, second officers and cadet pilots, for durations of between one week and two years to address a surplus of pilots, Singapore Air spokesman Nicholas Ionides said in an email.
"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 said, adding that pilots opting for no-pay leave can work for other carriers during the period subject to a written approval from Singapore Airlines.
The carrier has no plans to make the scheme compulsory at this point and sees the situation as temporary, he said.
Singapore Air, whose primary customers are business travellers, has been badly hit by a slowdown in corporate travel as major companies, mainly financial firms, cut costs.
The global airlines industry has been struggling to pass on the higher cost of fuels to customers as demand for business and leisure travel dwindled due to the global economic slowdown.
The International Air Transport Association cut its forecast for airline industry profits by a quarter to $3.5 billion for 2012 and warned the industry could plunge to an $8.3-billion loss if Europe's debt problems trigger another banking crisis.
(Reporting by Harry Suhartono; Editing by Himani Sarkar)
Reuters
