After Emirates made headlines by paying their employees almost six months’ base salary as a bonus, Singapore Airlines is stepping up the game and will cash out an eight-month salary bonus to its staff.
After both traffic and earnings collapsed during the pandemic, SIA has posted record profits recently, and this will reflect in the annual bonus for the employees who reportedly receive eight months’ bonification.
Has Emirates kicked off a trend that is going to reform the aviation industry when it came to employee profit-sharing when they announced last week that they pay out almost six months of base salary?
Such amounts were unheard of previously, and industry employees could be happy if they received two months’ bonus.
As Bloomberg reports, SIA will pay out the bonus to eligible employees in two components of profit-sharing & ex-gratia bonus.
Singapore Airlines Ltd. will pay staff a bonus of around eight months’ salary after posting a record annual profit.
Eligible staff will be paid a profit-sharing bonus equivalent to 6.65 months’ pay, and a maximum of 1.5 months’ salary of ex-gratia bonus in recognition of their hard work and sacrifices during the pandemic, a spokesperson for the airline said. Senior management won’t receive that additional ex-gratia bonus.
It was previously reported in the Straits Times that SIA’s revenues and profit have soared post-pandemic, which is in line with what Emirates has posted as well.
… On Tuesday, the airline unveiled record revenue and profit numbers for the current financial year, buoyed by record passenger loads.
Net profit came in at $2.16 billion for the full year ended March 31, rebounding from a loss of $962 million a year earlier.
Operating profit soared to $2.69 billion, erasing a loss of $610 million a year earlier. This came on the back of record revenue of $17.78 billion, a 133 per cent surge from 2022’s $7.62 billion.
Mr Goh said that as early as 2020, when the pandemic was in full swing and borders were shuttered and SIA had to ground most of its fleet, the airline was already planning for a recovery when the crisis passed.
Key measures included shoring up finances, including raising $15 billion via mandatory convertible bonds (MCBs) as early as March 2020. The group has managed to raise some $23.58 billion in liquidity since April 2020. …
The group’s passenger load factor (PLF) jumped 55.3 percentage points to 85.4 per cent, the highest in its history. PLF represents the percentage of available seats on a flight that are filled by passengers. …
Whoever has looked at the SIA fares recently isn’t surprised about the profits. Fares have been crazy ever since the country reopened. For example, in the past, I regularly booked round-trip tickets between Bangkok and Singapore for $200-300, but now it’s double that amount. The same goes for long-haul routes.
I’m more surprised about the load factors on these flights. Where do all these passengers come from? One could argue that there were some airlines in the region (such as Malaysia Airlines and THAI) that shrunk significantly, and maybe SIA was able to poach these passengers.
In any case, it’s good that the employees of Singapore Airlines will be able to profit from the success of the company.
Let’s see if there will be more airlines to reward their employees on this large scale. If you want to read up on the Emirates case, here is our article from last week:
Has EK opened Pandora’s box here, and now other carriers are under pressure to replicate what they have done, either to attract staff and not fall behind in recruitment efforts or for reputational purposes!?
Singapore Airlines (SIA) has announced a record profit for this year and is rewarding its employees with an 8-month salary bonus which amounts to pretty much 2/3 of their annual compensation. This is two months more than Emirates announced they’d be paying out and that already set a very high precedent. Of course, employees in Singapore have to pay taxes unlike in Dubai so there’s that.
I still can’t see North American or European carriers following this framework. It will put them under more pressure from unions though so the customers of these airlines might be in for even more strikes and worse service as their staff looks with jealousy to the bonus of their EK/SQ colleagues.