SIA, a major employer in the city-state, said the outsourcing was being undertaken to improve "cost effectiveness."

The statement said the outsourcing would mainly impact data entry and processing, such as handling flight coupons and inter-airline billings, with these tasks to be done by external providers.

"With the industry moving to greater use of e-tickets... the nature of the work being outsourced will change, and specialist providers can manage the transition effectively and at lower cost," it said.

SIA said the layoffs will be completed within two to three months.

An SIA spokesman said he did not know how much the redundancies would initially cost the company.

SIA has repeatedly said over the past year it needs to lower its operating costs to compete in an increasingly cut-throat industry, especially as it seeks to combat the slew of low-cost airlines that have emerged in Asia.

SIA last carried out retrenchments in June and July last year, when 596 people were laid off during the Asian travel industry downturn that was caused by the Severe Acute Respiratory Syndrome (SARS) epidemic.

SIA has rebounded strongly from the SARS crisis despite high oil prices, reporting a S$259 million (US$154 million) net profit in its fiscal first quarter to June this year.

The company lost $312 million in the same quarter in 2003.

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