Singapore Airlines Faces its ‘Greatest Challenge’

Tuesday 24th of March 2020

Singapore Airlines Faces its ‘Greatest Challenge’

On 23rd March, Singapore Airlines (SIA) said that it will slash 96% of its capacity as demand for air travel evaporates due to coronavirus-related movement restrictions. 138 of the 147 aircraft in the airline's fleet, including those of group carrier SilkAir, will be grounded.

Singapore Airlines' budget carrier, Scoot, will also ground all aircraft except 2. Travel restrictions imposed by governments around the world to slow the spread of the virus present "the greatest challenge that the SIA Group has faced in its existence," the airline said in a statement.

There has been a significant decline in the Group’s revenue and "It is unclear when the SIA Group can begin to resume normal services” as it cannot be said when the travel restrictions will be lifted and the demand in travel industry goes back to normal.

Like every other airline, the flag carrier airline of Singapore is also finding ways to cut down costs. The SIA Group has drawn on its lines of credits to meet its immediate cash flow requirements. “It’s important to have access to liquidity, to pay leases, to pay employees and to be able to continue to function.”

In a memo to staff, SIA Chief Executive Goh Choon Phong said the airline had agreed with unions on cost-cutting measures, including voluntary unpaid leave for staff up to divisional vice presidents and varying days of compulsory unpaid leave for pilots, executives and associates. These measures will affect about 10,000 staff.