SINGAPORE - Shuttered borders and a sluggish travel market have forced Singapore Airlines (SIA) to delay its aircraft delivery schedule and tweak its orders.
The airline said on Tuesday (Feb 9) that it had reached agreements with plane-makers Boeing and Airbus to defer aircraft deliveries amounting to more than $4 billion of capital expenditure between the 2020/21 and 2022/23 financial years to later years.
It is also converting its orders for 14 B787-10 to 11 B777-9s, which are bigger planes. These will ultimately be replacements for its ageing B777-300ER and A-380 jets.
SIA now has 132 planes - 50 from Airbus and 82 from Boeing - on order, down from 135 earlier.
"The agreements with Airbus and Boeing are a key plank of our strategy to navigate the disruptions caused by the Covid-19 pandemic," said SIA chief executive Goh Choon Phong.
"They allow us to defer capital expenditure and recalibrate the rate at which we add capacity, aligning both with the projected recovery trajectory for international travel."
Mr Goh added that the agreements allow the airline to retain its commitment to operating new generation aircraft that will enable the SIA Group to continue offering greater comfort and innovative products to customers, further drive operating efficiency, and support ongoing efforts to materially lower its carbon emissions.
"These will help to cement our leadership position in the airline industry as it recovers from the pandemic," he said.
The revision will result in aircraft delivery being spread out beyond the immediate five years and help SIA right-size capacity during the next three years.
The airline recently reported a net loss of $142 million for the three months to Dec 31, compared with a net profit of $315 million in the same period in 2019. But the latest figures were a significant improvement on the massive $2.34 billion loss in the July-September period.
Those second-quarter results were also marked by huge impairment write-downs in the wake of the Covid-19 pandemic.
Third-quarter revenue was $1.07 billion, less than a quarter of the $4.47 billion a year earlier, but an improvement on second-quarter turnover of $783.8 million.
Most industry observers do not see air travel returning to its previous levels anytime before 2023. But SIA has enough capital to see it through to the middle of 2023.