Singapore Airlines is in talks to defer deliveries of aircraft and its management will cut salaries in a bid to reduce costs. (Courtesy of Singapore Airlines/File)
Singapore Airlines Ltd. is cutting 96 percent of its capacity through the end of April, joining carriers around the globe slashing flights as the fast-spreading coronavirus curbs travel demand.
The company along with its two subsidiaries will ground 185 aircraft out of a total 196, which includes Airbus SE A380s and Boeing Co. 787s, according to a statement Monday. Singapore Airlines is in talks to defer deliveries of aircraft and its management will cut salaries in a bid to reduce costs.
The carrier is taking the actions “amid the greatest challenge that the SIA Group has faced in its existence,” it 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.”
Many airlines across the planet have resorted to capacity cuts topping 90 percent as virus infections soar past 300,000 and deaths approach 15,000. Some countries and cities are under lockdown in efforts to contain the outbreak, halting much of global transport. The travel industry needs government aid and bailout measures totaling as much as $200 billion if it’s to survive the crisis, according to the International Air Transport Association.
Singapore Airlines said it is discussing with financial institutions on future funding needs and has drawn on credit lines to meet immediate cash flow requirements. It will continue to explore measures to shore up its liquidity.
Shares of Singapore Airlines plunged as much as 8.6 percent, the biggest intraday drop since 2011, and traded down 8.3 percent as of 10:08 a.m. in Singapore. The stock has declined 39 percent this year, compared with a 30 percent drop in the benchmark Straits Times Index.
Singapore Airlines Chief Executive Officer Goh Choon Phong shaved 15 percent of his salary starting this month, while other senior management and board members have also cut their pay. The company is offering unpaid leave for staff.
Hong Kong’s Cathay Pacific Airways Ltd. last week said it’s cutting 96 percent of its services in April and May. Qantas Airways Ltd. furloughed most of its 30,000-strong workforce and scrapped all international flights, while reducing 60 percent of its domestic operations.
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