Singapore Airlines has just announced that they will be cutting 96% of their capacity until the end of April.
This comes shortly after the Singapore Government imposed a ban on short term visitors from transiting through or entering the island country, which will effective tonight at 23:59.
With no domestic flight network, this will be a double blow for the airline; countries around the world have also been further tightening their border controls over the past week.
Operating at 4% capacity, Singapore Airlines and SilkAir will ground 138 out of 147 aircraft; leaving just 9 aircraft in the sky. In addition, Singapore Airlines low-cost subsidiary Scoot is set to ground 47 out of 49 aircraft.
At the point of writing, details on the affected destinations and flights have not yet been fully released.
There is no mention when the airlines will resume their service, given that there is no certainty as to when the borders controls will be lifted. Based on Singapore Business Review, Singapore Airlines could have a potential loss of SGD $1 billion in the first quarter of FY2020/21.
As previously disclosed by Singapore Airlines, the airline will be taking several measures to build up their liquidity; these measures are to reduce expenditure and operating costs. These include:
- Discussion with aircraft manufacturers to defer upcoming aircraft delivery
- Salary and fee cuts for SIA Group’s management team and board of directors. A voluntary no-pay leave scheme will be offered up to certain management positions, unions have been engaged on the additional cost-cutting measures
- Drawing lines of credit to meet immediate cash flow requirements. Several financial institutions have been engaged in discussing future funding requirements
This is a developing story. More updates to follow on this post.