Singapore Airlines Group (SIA) will convert orders on 14 Boeing 787-10s to 11 Boeing 777-9s and delay deliveries of several Boeing and Airbus jets as part of a plan to defer more than S$4 billion ($3 billion) in capital expenditures between its 2020/2021 and 2022/2023 fiscal years. The plan also calls for Boeing and Airbus to deliver some of the aircraft in SIA’s order book over a longer period of time, spreading the delivery stream beyond the immediate five years, the group said Friday.
As a result of the agreements, SIA expects to save S$2.2 billion in aircraft expenditures during FY 2020/2021 and S$1.7 billion during FY 2021/2022. Fleet acquisition costs will fall by S$400 million in FY2022/2023 and S$500 million in 2023/2024. The group expects spending on aircraft to return to the previous planned S$4 billion in FY2024/2025.
SIA’s order book now shows firm orders for 35 Airbus A320-family jets, 15 Airbus A350-900s, 31 Boeing 737 Max 8s, 20 Boeing 787-8/-9s, and 31 Boeing 777-9s.
Operating a fleet of 185 passenger and cargo jets, SIA now flies only 64 of the airplanes due to Covid-related market suppression. It uses all seven of its freighters and has deployed 24 of its passenger jets on cargo-only services. Flight schedules now show that the group’s total passenger capacity will reach 25 percent of pre-Covid levels at the end of April, when it expects to serve some 45 percent of the points to which it flew before the crisis.
SIA reported a S$142 million net loss during the company’s fiscal 2021 third quarter, which ended on December 31.
“The agreements with Airbus and Boeing are a key plank of our strategy to navigate the disruptions caused by the Covid-19 pandemic,” said Singapore Airlines CEO Goh Choon Phong in a Tuesday statement. “They allow us to defer capital expenditure and recalibrate the rate at which we add capacity, aligning both with the projected recovery trajectory for international air travel.”