Singapore Airlines warns of 'greatest challenge in its existence'Business | 23 Mar 2020 10:49 am
Singapore Airlines will cut 96 percent of its capacity that had been scheduled up to the end of April, the airline said today.
The decision was made after the further tightening of border controls around the world over the last week to stem the coronavirus outbreak, SIA said in a news release, Channel News Asia reports. 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."
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.