SINGAPORE: Singapore Airlines (SIA) will cut 96 per cent of its capacity that had been scheduled up to the end of April, said the airline on Monday (Mar 23).
The decision was made after the further tightening of border controls around the world over the last week to stem the COVID-19 outbreak, SIA said in a news release.
About 138 SIA and SilkAir planes, out of a total fleet of 147, will be grounded as a result. Scoot, the company’s low-cost unit, will suspend “most of its network” and will ground all but two of its 49 planes.
This comes amid the “greatest challenge that the SIA Group has faced in its existence”, the company 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,” it said.
“The resultant collapse in the demand for air travel has led to a significant decline in SIA’s passenger revenues.”
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Over the last few days, the SIA Group has drawn on its lines of credits to meet its immediate cash flow requirements, it said, adding that it is in discussions with several financial institutions on its future funding requirements.
“The company is actively taking steps to build up its liquidity, and to reduce capital expenditure and operating costs,” it added.
SIA said it is in talks with aircraft manufacturers to defer upcoming deliveries, in the hopes of delaying payment for those deliveries.
The airline said in February that its management salaries and board directors’ fees have been cut. It has also implemented a voluntary no-pay leave scheme for staff 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,” said SIA.
“The company continues to explore measures to shore up its liquidity during this unprecedented disruption to global air travel.”
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Group CEO Goh Choon Phong, who has taken a 15 per cent pay cut, said it was an “extremely challenging time” for the company.
“We continue to focus on getting as many of our passengers as possible back home safely and protecting the jobs of our people,” he said.
SIA has “more than doubled” the handling capacity at its service centres and sales offices to attend to customers, he added.