Singapore's government moved on Monday to weaken the nation's pilots union after its members sacked union leaders last month for caving in to wage cuts and layoffs imposed by flag carrier Singapore Airlines.

The government, which owns 56 percent of the airline, said it would amend its Trade Unions Act so executives of the Airline Pilots Association of Singapore would not need approval from their members to negotiate and sign collective agreements.

It said "confrontational industrial relations" were a threat to the economy of Singapore, where the government, employers and unions co-operate closely and industrial action is rare.

The pilots ousted the union's leaders two weeks ago after the airline, Asia's biggest by market capitalization, reported a surprisingly strong return to profit in the months immediately following cuts in wages and jobs.

Deputy Prime Minister Lee Hsien Loong was quoted in the Singapore Straits Times newspaper on Saturday as saying the pilots and their union leaders "have to think very carefully, do they really want to take on the government?"

Singapore Airlines, traditionally one of the world's most profitable carriers, cut wages and jobs in June and July following a slump in passenger traffic during the Iraq war and outbreaks of SARS.

Around 600 of the airline's workers were laid off, including 156 cabin crew and 26 pilots, as the island's outbreak of Severe Acute Respiratory Syndrome pummelled passenger traffic last spring. Others took wage cuts of between 11 and 16.5 percent.

At the end of October, it reported a SGD$306 million (USD$177.5 million) September quarter profit that beat most financial market forecasts following its first-ever loss in the June quarter.

"We cannot allow confrontational industrial relations to add to the problems of SIA (Singapore Airlines), Changi Airport and our travel industry. It will put jobs and Singapore's economy at risk," the government said in a statement.

Singapore's "harmonious industrial climate" has been "a key pillar" in its economic progress. "The government will not allow any group to undermine this vital factor in securing good jobs and economic growth for our people," it added.

Prime Minister Goh Chok Tong said in May the airline would face a SGD$1 billion (USD$580 million) loss this year if its pilots rejected the cost-cutting measures. Most analysts expect Singapore Airlines to earn a net profit of around SGD$356.3 million (USD$207 million) for the full year.

(Reuters)