Coronavirus: Jetstar Asia to ground entire fleet; SIA cuts capacity by half

For SIA, the latest cuts mean that the airline will operate only 50 per cent of the capacity originally scheduled up to end-April. ST PHOTO: BENJAMIN SEETOR
For SIA, the latest cuts mean that the airline will operate only 50 per cent of the capacity originally scheduled up to end-April. ST PHOTO: BENJAMIN SEETOR

Jetstar Asia will ground its entire fleet while Singapore Airlines (SIA) is slashing its capacity by half, as the aviation sector continues to be hammered by the Covid-19 outbreak.

Announcing the latest flight cuts, SIA said yesterday that this is "an unprecedented time in the airline industry".

Meanwhile, Singapore budget carrier Jetstar Asia confirmed, in response to queries from The Straits Times, that it was grounding all of its 18 Airbus 320s.

All flights will be suspended from March 23 to at least April 15, a spokesman told ST.

She said: "The decision reflects responses beyond our control, including a rapid decline in forward travel demand due to government containment measures, corporate travel bans and a general pullback from everyday activities across the community."

Jetstar Asia is containing the impact as much as possible by asking staff to take paid and unpaid leave during this time, in addition to cancelling annual bonuses and the 13th-month annual wage supplement payment, she added.

The airline has about 800 employees, including 500 pilots and cabin crew. Customers impacted by the suspension will be offered a full refund in the form of a travel credit voucher, said Jetstar Asia.

For SIA, the latest cuts mean that the airline will operate only 50 per cent of the capacity originally scheduled up to end-April.

Chief executive Goh Choon Phong said in a statement: "We have lost a large amount of our traffic in a very short time, and it will not be viable for us to maintain our current network.

"Make no mistake; we expect the pace of this deterioration to accelerate. The SIA Group must be prepared for a prolonged period of difficulty." The airline said, without giving details, that it is actively taking steps to build up its liquidity.

PROLONGED PERIOD OF DIFFICULTY

Make no mistake; we expect the pace of this deterioration to accelerate. The SIA Group must be prepared for a prolonged period of difficulty.

SIA CHIEF EXECUTIVE GOH CHOON PHONG

Unions will also be consulted as steps are taken to further cut costs, the statement said.

Additional measures will be announced when they have been firmed up.

In a separate note to staff - a copy of which was seen by ST - Mr Goh said that the airline survived the Sept 11, 2001, terrorist attacks in the United States, the severe acute respiratory syndrome (Sars) outbreak and the global financial crisis.

"But Covid-19's impact has been far greater and deeper than any of those. The situation is worsening by the day... More hard decisions and sacrifices will be needed.

"We will consult the unions once again as we urgently take steps to further cut our costs," he said.

ST understands that SIA staff who are already being offered voluntary no-pay leave will soon have to take compulsory no-pay leave.

Mr Alan Tan, president of the Singapore Airlines Staff Union, which represents cabin crew as well as ground staff, said the union will work with management to ride out the crisis. "The priority is to save jobs," he stressed.

Airlines worldwide face dwindling demand amid travel curbs. The coronavirus outbreak has caused firms to scale back on business travel and discouraged tourism.

A version of this article appeared in the print edition of The Straits Times on March 18, 2020, with the headline 'Jetstar Asia to ground entire fleet; SIA cuts capacity by half'. Print Edition | Subscribe