Singapore Airlines Group on Monday said it will cut 96 percent of its system capacity originally scheduled through the end of April and ground most of its fleet as further tightening of border controls around the world to stem the Covid-19 outbreak bring commercial air travel to a near standstill. The moves will see 138 Singapore Airlines and SilkAir aircraft grounded out of a total fleet of 147, while 47 of 49 aircraft sit idle at low-fare subsidiary Scoot.
SIA Group said it had diversified its network and established 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 added.
Measures to build liquidity and reduce spending and operating costs at SIA include ongoing discussions with aircraft manufacturers to defer upcoming aircraft deliveries. Other moves have involved executive salary cuts and voluntary unpaid leave for certain management positions, while SIA remains engaged with unions on more cost-cutting measures, steps toward which the company said it would take “imminently.”
While SIA Group has drawn on its lines of credit to meet its immediate cash-flow needs, it remains in talks with several financial institutions for future funding requirements.
The SIA announcement comes amid several cases of virtual halts in flying by several major international airlines, including Dubai’s Emirates, which said Sunday it would suspend “most” of its services by March 25. A day later Abu Dhabi-based Etihad Airways said it would suspend all flights to and from Abu Dhabi International Airport on March 25 as well amid a directive from the UAE government calling for a 14-day suspension of all inbound, outbound, and transit passenger flights in the country. The UAE’s directive does not apply to cargo and emergency evacuation flights, and both airlines said it would continue those operations.