Singapore Airlines leads the way in slashing labour costs. SAS still worst in class

Singapore Airlines, British Airways, United Airways and Kingfisher Airlines all reported better than expected earnings for the three months ended 31-Dec-2009. The reason: they each aligned capacity levels much more closely with demand; but it was their action in slashing into labour costs that really made the difference. In a CAPA sample of airline earnings for the latest quarter ended (31-Dec-2009) only seven of 25 airlines reported lower wages bills, despite industry capacity reductions in Oct-2009, Nov-2009 and Dec-2009 of 3.3%, 1.4% and 0.7%, respectively. This does not augur well for 2010, with unions expected to push for higher wages as the airline traffic recovery takes hold.