Singapore Prime Minister Goh Chok Tong warned pilots at flag carrier Singapore Airlines that the airline would be grounded if they went on strike.

The comment comes as state-controlled Singapore Airlines, traditionally one of the world's most profitable airlines, was preparing to negotiate a new wage structure with newly appointed leaders of a pilot union.

"If the pilots refuse to fly, the airline will be grounded," Prime Minister Goh Chok Tong said in his annual New Year message.

The government has repeatedly criticised the Airline Pilots Association of Singapore after the union sacked its leaders in November for caving to wage cuts and layoffs imposed by the airline following a SARS crisis that hammered revenue in spring.

The pilot union has elected new leadership and the government, which owns 56 percent of the airline, is amending its Trade Unions Act so union executives would not need approval from their members to negotiate and sign collective agreements.

"No group of employees in Singapore should act without regard for the impact on others, or hold the company and fellow workers hostage to their narrow self-interests," he added.

"This is especially so of skilled workers like pilots, who have benefited from heavy investments in training, and thus occupy well-paid positions in their company," Goh said.

The government is worried that low cost carriers and longer-range aircraft such as Airbus A340-500 planes could reduce the city-state's role as a key regional aviation center and threaten Singapore Air's leading position in the region.

Officials have also been concerned that a dispute involving the pilots' union -- historically Singapore's most independent trade union -- could spread to other unions while unemployment hovers at 17-year highs.

The government hopes to avoid a repeat of 1980, when industrial action by pilots disrupted several flights in a month on high profile routes after a collapse in talks over higher salaries and benefits.

Singapore's leaders have said "confrontational industrial relations" are a threat in a country where the government, employers and unions traditionally have cooperated closely and where industrial action is rare.

(Reuters)