Saturday, February 2, 2013

SIA to axe 76 expat pilots to save cost

When it was announced recently that SIA is selling its 49% stake in Virgin Atlantic Airways the price of its share did not go up. It was trading around $10.50 to $11 a piece.
Two months later, SIA share price shot up and closed at $11.10 (yesterday) when it announced 76 expat pilots on fixed term contract will be axed. In this exercise, SIA would in my estimate save at least $25 million a year for the next 2 years 
(based on a capt salary of 23k + 5 k for housing allowance only).
The  sale of VS which is about S$439 million plus the cost savings of axing the expat pilots would definitely boost SIA's bottom line.
The cost saving measure does not end with the axing of the expat pilots only. I foresee more cost cutting measures coming in the next couple of months.

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