Singapore Airlines puts freeze on hiring of cadet pilots
AFPSINGAPORE -- Singapore Airlines (SIA) said Monday it had temporarily frozen its intake of cadet pilots, as the industry feels the impact of a slowdown in the global economy and high fuel costs.
October 23, 2012, 11:26 am TWN
The move is the second time in three years that the carrier has put a hold on hiring, and comes months after SIA asked some of its pilots to take unpaid leave as profits slumped.
In a statement SIA, which is considered a bellwether for the full-service airline industry, said it adjusted its recruitment policy on a regular basis “on operational requirements” adding that it last recruited a group of cadets earlier this year.
“As we have a temporary surplus of First Officers, we are not currently recruiting new cadets,” it said but added that it would not give specifics “for reasons of commercial confidentiality.”
The decision comes as the global economy suffers a slowdown fuelled by the eurozone debt crisis, a softer growth in China and a patchy U.S. recovery.
SIA encouraged its pilots in March to go on voluntary leave without pay and work for other companies. That call came as it saw net profit in the year to March slump 69 percent to SG$336 million (US$275 million) owing to high oil prices and rising competition.
Year-on-year net profit rebounded 73 percent in the first fiscal quarter to June, but SIA painted a gloomy outlook for the rest of the year.
“The global economy remains uncertain as Europe struggles to contain its debt crisis, while the United States faces a sluggish recovery,” SIA said in July.
“This has negatively impacted business confidence and the outlook for travel demand,” it said.
The International Monetary Fund, World Bank and Asia Development Bank all recently slashed their growth forecast this year for the world and for Asia.
The International Air Transport Association (IATA) earlier this month said it expects global airlines to book US$4.1 billion in profits collectively this year, less than half the US$8.4 billion seen in 2011.
IATA director general Tony Tyler said “the industry's profitability still balances on a knife-edge, with profit margins that do not cover the cost of capital.”