SIA, Airbus, Boeing – Will Aviation Continue To See Retrenchments?

Boeing Asia Pacific Aviation Services (Bapas), a joint venture between The Boeing Company and SIA Engineering Company, will reduce its workforce by 13%.

27 employees of 204 Bapas employees will be affected by the redundancy exercise.

After the downsizing, 82% of its workforce will be Singaporeans. Prior to the downsizing exercise, Singaporeans made up 79% of the workforce.

In a joint statement with the Singapore Industry and Services Employees Union (SISEU), Bapas said downsizing was seen as a “last resort”.

The company has already exhausted all other cost reduction options, and steps were taken early in the pandemic to manage costs and save jobs.

The company added that it had worked with SISEU to extend fair pay conditions and employment-related support to affected employees.

Aviation is one of the sectors hardest hit by COVID-19

planes on the ground
Image Credit: Bloomberg

Airlines around the world are struggling with the outbreak of Covid-19, as a record number of planes have been grounded for months.

In June 2020, major airlines such as Lufthansa, British Airways and Emirates cut tens of thousands of jobs.

Despite the additional support of S $ 187 million for the aerospace industry, Singapore Airlines (SIA) has already spent half of the S $ 8.8 billion on sales of shares it raised in two months.

More than 6,000 SIA employees have also taken unpaid leave to help the company cope with the collapse of air travel.

Manufacturers of aerospace components have also been affected by the pandemic. Earlier this month, the aircraft manufacturer Airbus laid off some of its employees in Singapore.

Even though the European manufacturer has refused to reveal the number of laid-off workers, the lack of travel has dented the demand for its aviation support services.

Aviation cuts are probably not over

Since the borders of most countries remain closed to some extent, airlines are unlikely to see any performance improvement anytime soon.

Even though governments around the world have established green lanes for business travelers, these efforts do not significantly boost airline profits.

Currently, Singapore only has two green lanes open, which represents just 15 SIA flights traveling between China and Malaysia per week.

Airlines have also developed innovative ways to maximize their resources.

For example, Taiwan’s Eva Airlines launched flights to nowhere, to mimic the travel experience for travel hungry customers.

However, with most of the airline revenue streams cut off, the aviation industry is unlikely to be able to return to its pre-Covid-19 performance anytime soon.

As business continues to take a hit, downsizing is also expected to persist.

Featured Image Credit: The Street

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Jothi Venkat

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