Singapore Airlines has announced a groundbreaking reward for its dedicated workforce, dishing out a bonus equivalent to eight months’ salary following a year of unprecedented financial success. In doing so, they also steal the limelight from one of their biggest rivals in a PR masterclass.
It’s been a tricky news week for airlines everywhere. From Joe Biden’s plans to make airlines pay for delays to a lacklustre response from Emirates staff when a man decided to urinate twice in their business class cabin, this announcement from Singapore Airlines (SIA) is something of a breath of fresh air.
SIA has said that eligible employees will receive a profit-sharing bonus equivalent to 6.65 months’ pay in a gesture that aims to recognise the pivotal role played by its staff during the immensely challenging global pandemic. On top of that, a 1.5 months’ salary will be granted as an ex-gratia bonus to all staff, excluding senior management.
WATCH: Big pay packets aren’t the only thing that Singapore Airlines are good at…
It’s worth adding, however, that this deal isn’t just the result of a surprisingly generous C-suite who have decided to make it rain for their employees out of the good of their own hearts; its actually the result of years of hard work from staff unions, as clarified by a spokesperson from SIA:
“The bonus for Singapore Airlines’ employees is based on a long-standing annual profit-sharing bonus formula that has been agreed with our staff unions”.SIA Spokesperson
Having said that, it’s also a smart move on the part of SIA’s top dogs: not only do they give their employees a much-needed morale boost, but they also get to put record profits to good use in a week where many airlines have been coming under fire for bumper profits that are made at the customer’s cost, with fares skyrocketing in recent months.
On Tuesday, Singapore Airlines announced its net income of S$2.16 billion ($2.44 billion AUD) for the fiscal year ending March 31st. The airline also revealed robust forward sales across all cabin classes with an acute surge in bookings to destinations like China, Japan, and South Korea. In light of all of this, Singapore Airlines’ shares enjoyed a 1.2% bump on Thursday, suggesting positive market sentiment.
Profits weren’t the only winning figures that SIA announced this week: over the course of the past year SIA and its budget subsidiary Scoot have served a staggering 26.5 million passengers, a six-fold increase year on year. In March, passenger capacity reached 79% of pre-Covid levels and in April alone the airline flew 1.75 million passengers, an impressive 53% increase compared to the same month last year.
SIA’s generous pay announcement comes hot on the heels of a similar move from Emirates who, having also announced record-breaking profits, made headlines by granting their staff a bonus that would have been a game-changer all of its own, had SIA not come swooping in with an insidious but ingenious bit of PR.
The Emirati airline’s remarkable $4.3 billion AUD profits showcase how some carriers, including SIA, have made a remarkable recovery post-pandemic. This isn’t the case across the board, however. Rival carrier Cathay Pacific still faces an uphill battle as its revenue remains approximately half of pre-pandemic levels, and it’s certainly not alone in finding the road back from COVID to be a challenging one.
Emirate’s decision to reward their 50,000+ employees with a six-month salary bonus alongside their May paycheque was an undoubtedly generous gesture but has sparked some controversy given the airline’s massive workforce reduction efforts during the pandemic.
Herein lies the key to unravelling this surprising bout of airline generosity and subsequent oneupmanship: though it makes for good headlines and happy employees, its ultimately very easy to doll out a hefty bonus when you’ve massively cut the number of paycheques you’re mailing out in the first place.
Tactics like this – whereby C-suits chase an easy PR win by giving away some (but never all, or even most) of their soaring profits – have fast become a feature of airline strategy as they’ve already had to stomach mass layoffs thanks to the unexpected challenge of COVID.
The bigger question looking forward is this: how rapidly will this pattern spread to other industries as the rise of AI and automation brings about redundancies across the board, and for how long will people celebrate fewer people being paid more money while swathes of jobs are lost and a growing minority of people take home no money at all?