SIA Cuts Singapore-Brunei Daily Flights Because Of Iraq And SARS

Bandar Seri Begawan - Singapore Airlines (SIA) cut its daily Singapore-Brunei flights yesterday amid falling passenger load as Bruneians avoided travel to the island state because of the mystery killer illness Severe Acute Respiratory Syndrome (SARS) outbreak there.

SIA will now only operate its Brunei schedule on certain days of the week, an airline spokesman said.

Meanwhile the sultanate's national carrier Royal Brunei Airlines (RBA) has also cut back its flights to Singapore.

SIA spokesman said Thursday that it may further cut back capacity if needed in response to sharply lower demand for travel amid the Iraq war and spread of the deadly illness SARS.

"We can't rule out the possibility of further cuts (in capacity)," an SIA spokesman told Dow Jones Newswires adding the airline will also "seriously consider" staff layoffs as a last resort.

SIA has suspended 125 weekly flights recently, accounting for 13.6% of overall capacity.

The SIA spokesman said it was a bit early to say if the cutbacks so far were adequate as they are still being implemented.

An industry source said SIA realizes it is facing a difficult situation but noted it is taking measures such as deferring nonessential projects, freezing recruitment and cutting back on capacity to lower costs.

"If all else fails, then the airline will look at layoffs," he said.

SIA's comments follow recent announcements by regional rivals Qantas Airways Ltd. and Cathay Pacific Airways Ltd. on staff layoffs and capacity cutbacks.

Australia's Qantas Wednesday said it will slash 1,000 jobs as the war in Iraq and SARS caused bookings to drop by up to a quarter on some international routes.

And earlier, Hong Kong's Cathay Pacific said it was cutting passenger capacity by 14%.

The deadly SARS virus has claimed nine lives and has infected 126 people in Singapore as of late Wednesday.

The situation is worse in Hong Kong, with 27 dead, and China, where 55 people have died from the disease.

Meanwhile SIA pilots' union has asked the carrier to scrap flights to Hong Kong and the southern Chinese city of Guangzhou which are at the centre of global health scare due to the SARS virus.

The Air Line Pilots Association is also proposing to management that there should be no overnight stays for crew members in Beijing and Shanghai.

"We urge SIA to do that (suspend flights to Hong Kong and Guangzhou) not just for the crew but for the nation as well," union spokesman Frank John said Friday.

"It's better we don't go to Hong Kong and Guangzhou," he told the financial news service AFX-Asia.

SIA spokesmen were not immediately available for comment.

The World Health Organisation issued an unprecedented advisory on Wednesday, warning travellers to defer non-essential trips to Hong Kong or Guangdong -- of which Guangzhou is the capital -- because of the outbreak of SARS.

Hong Kong and Guangdong are the hardest hit by SARS, an unusual form of pneumonia that could be potentially fatal and has no known antidote yet.

SARS is believed to have originated in Guangdong in November, spread to Hong Kong in February and from there to nearly two dozen countries through airline travel, killing more than 80 people and infecting some 2,400 others.

SIA said on Wednesday it plans to cut flights to Hong Kong by 37 percent -- from 41 to 26 a week.

Weekly services to Guangzhou will be cut to five from seven. All services to Kaohsiung will be suspended from April 15.

In a related development SIA is "seriously" considering job cuts as passenger volumes fall due to the health scare sparked by the killer SARS virus, a company spokesman revealed.

The spokesman however stressed that retrenchment will be carried out only as a last resort, pointing out that SIA did not lay-off any staff during the 1991 Gulf War, the Asian financial crisis in 1997-1998 and the aftermath of the September 11, 2001 terrorist attacks in the US.

"Retrenchment is a step we always regard as a last resort, but sometimes there's really no alternative. Given the situation that we and many other airlines are currently facing, retrenchment is one of the options that we have to seriously consider," the spokesman said.

SIA, one of Asia's most profitable airlines, earlier announced it was slashing 13.6 percent of total capacity as travellers defer plans for fear of contracting Severe Acute Respiratory Syndrome (SARS).

It has also deferred new aircraft orders although deliveries of previous orders will proceed as scheduled this year and next.

In a new statement, the spokesman said the airline is currently in the process of assessing the impact of the cutback in operations to match the downturn in demand due to SARS, the war in Iraq (news - web sites) and the global economic slump.

"We are continuing to monitor the situation and further capacity reductions are under consideration," he said.

The SARS virus, which manifests itself as an unusual form of pneumonia, has killed more than 100 people and affected about 2,500 worldwide, most of them in East Asia. Nine deaths have occurred in Singapore.

Australian carrier Qantas Airways has announced it will cut 1,400 jobs due to the impact of SARS and the war in Iraq, and Hong Kong's Cathay Pacific said it was facing its gravest situation in 26 years.

Philip Wickham, vice president for equity research at ING Financial Markets in Hong Kong, said the severity of impact of the health scare on the airlines will depend on how soon the outbreak can be contained.

Scientists have yet to find a treatment for the SARS virus, which cannot be treated by antibiotics used against ordinary pneumonia.

Announcements that layoffs are an option can be a way some carriers are preparing their staff for any eventuality and gives management the flexibility in future moves to trim costs, said Wickham, who tracks regional airlines.

"It all depends on how deep the demand falls through," he told AFP, adding that currently, SIA and Cathay still have the cash to prevent any staff layoffs."

Click Here To Have Your Say On This Story

Brudirect.com