By Karamjit Kaur, Aviation Correspondent

SINGAPORE Airlines (SIA), which cut staff salaries across the board after posting a $307 million loss in the April to June quarter, has agreed to a union request to give back some of the money to lower-income workers.

Instead of a 10 per cent pay cut, those earning less than $1,800 will take a 5 per cent cut instead.

About 150 staff are believed to be affected by the move.

Each will receive a lump sum payment for the cuts, which took effect in August, for three months.

For someone who earns $1,700, for example, this works out to $85 a month.

Mr Alan Tan, president of the SIA Staff Union, which represents cabin crew and other rank-and-file staff, told The Straits Times: 'It is hard for low-income employees because, apart from the pay cuts, they are also affected by the shorter working month scheme.

'We are heartened that management has considered our appeal and agreed to a lower pay cut for these workers.'

SIA spokesman Nicholas Ionides said the airline agreed to the union's appeal after having considered the impact of the full monthly variable component (MVC) cuts on the group of lower-income staff and their families.

Under agreements signed with its three unions, SIA will cut 25 per cent of the MVC built into staff salaries if the airline incurs an operating loss of $50 million or more in any given quarter.

All of the MVC, which currently makes up 10 per cent of an employee's total pay, will go if losses exceed $200 million - which happened in the April-June quarter.

The cuts are effective for three months, which means that the airline's financial health in the July-September quarter will determine whether staff pay will be reinstated.

Apart from the pay cuts, SIA - which has been hit by an economic downturn that has dealt a severe blow to first- and business-class traffic in particular - has introduced a slew of other cost-cutting measures.

These include a shorter working month, voluntary no-pay leave, and early retirement for those aged 50 and above and who have been with the airline for at least 15 years.

To deal with the business slowdown, the airline also plans to take 16 aircraft out of the skies for the financial year ending March 31 next year.

Speaking to reporters on the sidelines of an industry conference in Hong Kong earlier this week, SIA chief executive officer Chew Choon Seng said planes are starting to fill up again.

Last month, for example, the airline managed to fill about eight out of every 10 seats.

Yields, however, will remain in negative territory in the current quarter ending December, Mr Chew said.

Following its $307 million loss, SIA said then that it could close its annual books in the red, unless the situation improved.

The airline, which went public in 1984, has never posted a full-year loss. Before this, it suffered a quarterly loss only once - of $312 million when Sars hit in 2003.

This article was first published in The Straits Times.