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Singapore government announces support package to rescue aviation sector

The Government has announced an S$ 870 million OneAviation Support Package for the aviation sector in Budget 2021. The aviation sector is among the hardest-hit sectors by the COVID-19 pandemic across the globe, and Singapore has felt the drastic impact of the pandemic. The Package will enable aviation companies to preserve core capabilities and survive the crisis, and maintain Singapore’s position as an aviation hub post-COVID-19. The funding for the sector comes under the $11 billion Covid-19 Resilience Package announced in the Budget speech.

Many aviation companies have reduced their workforce over the past year. Key aviation companies have also done likewise in a very judicious manner, mostly affecting foreign manpower.Singapore must avoid further reductions to the aviation workforce so that companies will not lose their core local capabilities, which has taken many years to build up. If the sector weakens its capabilities, this will hamper its ability to recover.

The OneAviation Support Package comprises two key components. First, enhanced manpower support amounting to $330 million. Under the Jobs Support Scheme (JSS), companies in the aviation sector will receive 30% support for wages paid from April to June 2021, and 10% support for wages paid from July to September 2021.

The OneAviation Support Package will further enhance wage support for companies in the aviation sector through an Aviation Workforce Retention Grant, to 50% support for wages paid to local employees, Singapore Citizens and Permanent Residents only, from April to September 2021 (up to a cap of S$4,600 of gross monthly wages).

In other words, companies in the aviation sector that are currently eligible for Tier 1 JSS support will receive an additional 20% support for wages paid to each local employee from April to June 2021, and an additional 40% support for wages paid to each local employee from July to September 2021.

Minister for Transport Mr Ong Ye Kung said: “Aviation is one of the hardest hit sectors during this pandemic, if not the hardest hit, as Changi and its stakeholders have lost 97.5% of its customers. Yet for a city-state like Singapore, the air hub is essential to connect us with the rest of the world and continues to be our lifeblood. This support will help Changi tide through the crisis, while we explore ways to reopen borders safely.”

In addition to wage support, companies in the Air Transport sector will continue to receive training support through the Enhanced Training Support Programme, which has been extended to December 2021. On top of this, Singapore-based airlines will receive support to convert some of their existing pilots to operate other aircraft types, to provide an adequate pool of trained pilots to support the eventual recovery.

Second, cost relief amounting to $540 million. Pre-COVID-19, companies at the air hub had to pay various fees, such as landing and parking fees for airlines, rental for lounges and offices, and licence fees for ground handling and catering services.

During this period, aviation companies have been unable to recover their cost of operations due to the sharp fall in passenger volume, even as the higher cost is incurred to implement stringent measures to enable safe air travel and minimise the risk for airport workers. These include biosafety and safe management measures, segregation of transfer-transit passengers from origin-destination passengers, and systems to support COVID-19 on-arrival testing requirements.

The Package will extend existing rebates on fees and charges at Changi and Seletar Airport for another year. The rebate on fees payable by pilots, air traffic controllers and aircraft maintenance engineers will also be extended for another year.

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