Mon, Mar 23, 2020 – 9:52 AM
UPDATED Mon, Mar 23, 2020 – 10:20 AM
SINGAPORE Airlines (SIA) on Monday announced it is cutting 96 per cent of its planned capacity originally scheduled up to end April given further tightening of border controls around the world over the last week.
It is also exploring ways to increase liquidity and reduce capital expenditure and operating costs amid the ongoing Covid-19 outbreak, it said in a statement.
The announcement confirms an earlier Business Times report that the national carrier is studying the possibility of storing some of its planes.
The fresh cuts will result in the grounding of around 138 SIA and SilkAir aircraft, out of a total fleet of 147, SIA said. Its low-cost unit, Scoot, will also suspend most of its network, grounding 47 of its fleet of 49 aircraft.
SIA described the situation as “the greatest challenge that the SIA group has faced in its existence”.
It added that it was unclear when the SIA group could begin to resume normal services.
Chief executive Goh Choon Phong said the company was focused on protecting jobs and getting as many passengers as possible back home safely, adding that the flag carrier had more than doubled handling capacity at its service centres and sales offices.
The mainboard-listed company is now aggressively pursuing cost-cutting measures, including salary and fee cuts for company directors and the SIA group’s management, and a voluntary no-pay leave scheme for certain management positions.
It is also engaging with unions on additional cost-cutting measures, with more steps to be taken imminently, it said.
The airline is currently in discussions with aircraft manufacturers to defer payment and deliveries of upcoming aircraft.
It has drawn on its lines of credit to meet its immediate cash flow requirements, and is in talks with several financial institutions for future funding requirements, it said.
Shares in SIA fell 8.1 per cent or S$0.49 to S$5.53 as at 9.34am on Monday.