Singapore Airlines will reduce capacity by more than 95 percent towards the end of April. The decision will be taken after further tightening border controls around the world to contain the Covid19 outbreak.
This will result in the landing of around 138 Singapore Airlines and SilkAir aircraft from a total fleet of 147. The company described the situation as “the biggest challenge facing the Singapore Airlines Group in its existence”.
The group’s cost-effective unit, Scoot, will also shut down most of its network, resulting in the landing of 47 of its fleet of 49 aircraft. The group diversified its network and founded Scoot to spread its risks and cover a wide range of passenger and market segments.
Without a domestic segment, however, the group’s airlines become more vulnerable when international markets increasingly restrict the free movement of people or ban air travel altogether. Singapore Airlines said it is unclear when the normal flight will resume because it is not certain when the strict border controls will be lifted.
The company added that it is actively taking steps to build up its liquidity and reduce investment and operating costs. This includes potential deferrals for airplanes, and salary cuts have also been agreed for management and directors.
In view of the deteriorating situation, the unions added by Singapore Airlines have taken additional cost-cutting measures that are necessary to warn that steps “will be taken shortly”.