Lee Kuan Yew: Govt cannot let pilots have their way

Senior Minister Lee Kuan Yew issued a stern warning to Singapore Airlines pilots on Monday that the Government will not allow them to go slow or work-to-rule, which would damage the airline’s reputation and cost it hundreds of millions of dollars in losses in a matter of months. He made the remarks in a speech and a question-and-answer session at the Global Branding Forum. He also spoke about his style of governing compared to that of the younger ministers and the branding of Singapore. We reproduce excerpts:

RIGHT at this moment, we’re having a little problem with our pilots.

Because of Sars, Singapore Airlines lost a few hundred million dollars that quarter. They persuaded, with the help of the Ministry of Manpower, the unions – not just the pilots’ union but the five unions across the board in SIA – to take pay cuts, adjust work schedules and generally trim down.

But the second quarter, July to September, they showed a profit. Whereupon the pilots say: ‘We’ve been taken for a ride.’ They sack the committee.

But they approved it and this is just the first glimmer of recovery in an industry that’s facing very grave challenges.

No one can say how mainline carriers will fare in the next one, two years. Budget carriers are coming into Asia and it’s a matter of time before they pose the same challenge to mainline carriers as they do in America and now increasingly in Europe.

But the pilots’ union is not interested in that. They just say: ‘You squeezed us when the going was bad, now we want it back.’

Well, we’re not going to have that. Both management at SIA and the pilots’ union, and all the unions in SIA, know that when the Government decides that its industrial relations is a key factor in its progress, in its economic well-being, and it says no, it means no.

And if they’re confrontational, then either the union gives way or the union is able to knock the Government down.

Now in Europe, when Air France goes on strike, sometimes the minister has to resign or Air France management has to make adjustments.

I can assure you that in Singapore, when we decide that they are breaking the rules of the game, the unspoken rules as to how we survive, how we have prospered, then either their head is broken or our bones are broken.

And when that is understood, we then talk sense.

I come back to the pilots. They’re a special breed. The pilots know that the company has spent half a million or three-quarters of a million dollars training a person to fly a 747.

So, it’s a capital-intensive industry and if they decide to go slow or walk out, then all that capital is just going to lie frozen on the ground.

So after the Sars debacle, SIA lost money for the first time in its history, they accepted the pay cuts, no-pay leave, certain adjustments in work schedules with a proviso that if SIA makes money, as it makes money it will restore all its cuts.

And it goes up to 115 per cent of what was taken away if it proves to be as successful as last year.

When – after settling this and voting in favour of the executive committee saying, ‘yes, we support this’ – SIA makes $300 million in one quarter, they decide ‘We’ll sack the committee, we’re going to take over. This collective agreement ends in a few months, we’re going to be tough’.

If we sit back, and SIA has had troubles with the pilots for a long time, as I’ve said, they think they’re special, they’ve got huge egos, I’m told.

So, for instance, when SIA changes first-class seats to totally flat reclining seats and so there are fewer first-class seats. I think now the first-class cabin, from my recollection, has only about 12 seats when there used to be 16 or 18 seats.

The captains were allowed, when they were resting, to take a first-class seat which could recline.

But now, there are not enough first-class seats. The company says: ‘We will pay you the difference.’ No, they want the first-class seat. In other words, there’ll be fewer than 12 passengers if you have two being used by pilots.

We know that, if we allow this to go on, there’ll be a go-slow, there’ll be some work-to-rule and we’ll get the Cathay Pacific situation.

Now you can have that in Hong Kong. You’re not going to have that in Singapore. I will not allow that because I literally decided, in the early days, that I will preserve this potential business for Singapore.

We had Malayan Airways, which was based here. When we joined Malaysia, we became Malaysia-Singapore Airlines, a joint airline.

Then they decided they wanted to go off on their own so we built up workshops in Kuala Lumpur so they could go off.

And from that moment, way back in the 1960s, we built ourselves up as an international airline because, where were we going to fly to? From Changi Airport to Sembawang Airport, to Seletar, to Paya Lebar?

So we had to go international or nothing.

Today, with our population of three million – plus another one million foreigners, it’s four million – we are carrying the loads of Australia, with a population of 20 million, or for that matter, many other airlines.

In other words, we’re carrying other people’s passengers. There’s no catchment here.

You do that because your service is not only safe, it’s not only reliable, but it is exceptionally good.

This is a service industry. You have stewards or stewardesses or pilots playing work-to-rule, you lose that cachet. So we are telling them, both management and unions, ‘you play this game, there are going to be broken heads’. Let’s stop it.

They know what this is all about. We are not fools. We know what the management knows. We know the union side too because we’ve got unionists on our side and we are going to solve this before it gets troublesome and solve it we will.

If we sit back and do nothing and allow this to escalate and test the wills, then it is going to lose hundreds of millions of dollars in one, two, three months of nastiness. We are not going to have that.

I belong to the old school. I believe that it is better to be feared than to be loved. My younger colleagues sometimes want to be both.

I decided a long time ago that popularity is something volatile. They feel good, they get their bonuses, you’re popular.

They are squeezed, there’s a recession, you’re blamed for it, your stocks go down. And the key is not to hold an election when people are not feeling good.

I do not believe that popular government means you have to be popular when you govern. I think the best thing to do is to do all the unpopular things when you are governing so that at the end of your term, you have the choice of a date when you feel that they will be most grateful that you’ve done all these unpopular things and they vote for you.

I don’t know about branding. I do know that you need a good reputation, not just outside Singapore but within Singapore, with your own people.

This is a place that works, that must work and continue to work because it is based on principles. And the first principle is nobody owes us a living. Straits Times