SATS implements “Save Costs in Order to Save Jobs” measures in view of Covid-19

Singapore – The chief ground-handling and in-flight catering service provider for Changi Airport has begun cutting costs measures in response to the dwindling number of passengers and flights due to the Covid-19 outbreak.

A memo entitled “Save Costs in Order to Save Jobs” was released to all SATS (previously Singapore Airport Terminal Services Limited) staff by President and Chief Executive Officer (CEO) Alex Hungate, according to a report by Mothership.

The memo, released on February 19, began with the “business implications of the sharp reductions in passengers and flights across Asia that have resulted from [the Covid-19] epidemic.”

As governments have started imposing travel restrictions, many of the company’s airline customers have introduced cost-cutting measures and began to reduce flight frequencies, said the CEO. “No one can predict how much longer this virus will persist, so we must brace ourselves for further declines,” said Mr Hungate.

Three measures were introduced in the memo.

A 10 per cent pay cut will be implemented on the management team, including Mr Hungate. It will include all SATS Vice Presidents and above.

Employees were then encouraged to take voluntary unpaid leave. “For those who have not been able to spend time with their family, or simply want to take a break from work, now is the time to do so,” noted the memo. “Your job will not be replaced, and we will await your return.”

Lastly, employees aged 55 and above were given the option of early retirement. “The company will make provisions to trigger the Employee Assistance Payments (EAP) at an earlier retirement age.”

It was stated in the memo that even as the virus outbreak lessens in severity, “it will take some time for travellers to regain confidence and start to book flights again.”

SATS mentioned that the Budget 2020 support measures were “certainly welcome,” however, “revenues are falling much further than the level of financial support that the government is able to provide.”

Staff were also urged to look for other ways to save costs in their respective departments. “Every small saving will help to protect jobs, so please work with your line managers to brainstorm ideas,” said the CEO.

Netizens shared their perspective on SATS’ management plan, with many disagreeing on the measures to be implemented.

James Tan called the early retirement option to be “inhumane and inconsiderate” and suggested that management should take a more substantial pay cut.

Much of the focus was on the elderly staff who have contributed to the company over the years suddenly being offered early retirement.