Singapore Airlines has announced it will be cutting 96 per cent of the capacity that had originally been scheduled between now and the end of April, given the further tightening of border controls around the world to stop the spread of coronavirus.
As a result of this, approximately 138 SIA and SilkAir aircraft will be grounded, out of a total fleet of 147.
The SIA Group’s low-cost subsidiary Scoot will also suspend most of its network, resulting in the grounding of 47 of its fleet of 49 aircraft.
In a statement on its website, the airline said: “It is unclear when the SIA Group can begin to resume normal services, given the uncertainty as to when the stringent border controls will be lifted.
“The resultant collapse in the demand for air travel has led to a significant decline in SIA’s passenger revenues.
“The Company is actively taking steps to build up its liquidity, and to reduce capital expenditure and operating costs. As mentioned on 17 March 2020, SIA will continue to aggressively pursue all measures to address the impact of the Covid-19 outbreak on the Company.”
These measures being pursued by Singapore Airlines include:
• Ongoing discussions with aircraft manufacturers to defer upcoming aircraft deliveries. If agreed, this will consequently defer payment for those aircraft deliveries;
• salary cuts for the SIA Group’s management with the Company’s Directors also agreeing to a cut in their fees, and a voluntary no-pay leave scheme up to certain management positions. Given the worsening situation, the unions have been engaged on the additional cost-cutting measures that are needed and more steps will be taken imminently; and
• over the last few days, the SIA Group has drawn on its lines of credits to meet its immediate cash flow requirements. The SIA Group is engaging in discussions with several financial institutions for its future funding requirements.
Singapore Airlines has also said that it will continue to explore measures to shore up its liquidity and will release further details when these have been put in place.
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