Singapore Airlines will slash schedules and ground almost all aircraft, as the coronavirus pandemic presents “the greatest challenge that the SIA Group has faced in its existence”.
Due to the further tightening of border controls globally, SIA will cut 96% of scheduled capacity until end-April and ground 138 of 147 aircraft operated by SIA and regional carrier, SilkAir.
Low-cost unit Scoot will also suspend most of its network and ground all but two of its 49 aircraft.
Singapore is also banning short-term visitors from entering or transiting through the city state, effective 23 March 11:59, in an attempt to reduce the number of imported coronavirus cases.
The carrier said today: “The SIA Group diversified its network and set up Scoot to spread its risks and cater to a wide range of passenger and market segments. However, without a domestic segment, the group’s airlines become more vulnerable when international markets increasingly restrict the free movement of people or ban air travel altogether.
“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 reiterates that it is “taking steps to build up its liquidity, and to reduce capital expenditure and operating costs” and will “aggressively pursue all measures to address the impact of the Covid-19 outbreak on the company”.
This includes salary and fee cuts for SIA Group’s management and directors, and a voluntary no-pay leave scheme for staff up to a certain level of seniority.
“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,” it says.
The company is also in discussions with aircraft manufacturers to defer upcoming aircraft deliveries.
“If agreed, this will consequently defer payment for those aircraft deliveries.”
The group has, over the last few days, drawn on its lines of credits to meet immediate cash flow requirements.
“The SIA Group is engaging in discussions with several financial institutions for its future funding requirements.”
It adds: “The company continues to explore measures to shore up its liquidity during this unprecedented disruption to global air travel. The company will release further details when such measures have been firmed up.”
Cirium fleets data shows that Singapore Airlines has 68 aircraft in its orderbook, comprising 20 Boeing 777-9s, 29 787-10s, and 19 A350s. Scoot has 51 aircraft on order, comprising five 787s, and 46 A320neo family aircraft, while SilkAir has unfilled orders for 31 737 Max 8 jets.