Wednesday, August 27, 2014

Whoever wins the next election,cost cutting will continue

Whether it's Allan,PJ or Vernon win the upcoming election, the cost cutting measure will continue. The main reason is that SIA is not earning much these last few years. It has an obligation to its shareholders and do or die, SIA must pay handsome dividends or else they will sell off their shares.
In fact, most are avoiding airline shares these days. There are too many airlines, budget included which cause the over supply of seats. It's all about supply and demand. Yields have dropped drastically.

Take a look at MAS. Even before the two mishaps, they were losing money like crazy. They lost money in five straight quarters. Now they are on the verge of collapsing under huge debts. In the end, the government has to come in to save MAS.
When the Malaysian government take MAS private, it will shaved of at least 25% of its total workforce, cabin crew included.

Qantas is facing a similar problem. It will retrench its staff and cabin crew to avoid huge losses in the coming years.

SIA is not immune either. It's low cost carrier Scoot is making a loss in its first year of operation. Tiger which SIA has a 40% stake is also losing big money.

Therefore, who ever wins the cabin crew union election it will be an uphill task to restore whatever that were taken away.

That said, matters like demotion (ifs Moon's case) and dismissal (ifs Simon's and Jeffrey's case) may not have happened if the union was stronger. Perhaps, these are things the company could compromised but not on money matter.

No comments: