CORONAVIRUS: Singapore Airlines guts capacity

Singapore’s flag carrier Singapore Airlines (SIA) announced Monday (23 March) that it was gutting its capacity by 96 percent because of strict border controls being imposed by various countries due to the ongoing spread of the COVID-19 coronavirus that has killed almost 15,000 people worldwide. The airline is the latest to make drastic cuts as air travel grinds to a virtual halt. Cathay Pacific announced last week it was also cutting 96 percent of its capacity for itself and its Cathay Dragon unit. Qantas and its Jetstar also announced they were cutting capacity and grounding planes along with Philippine Airlines and Air New Zealand said it was cutting 85 percent of its capacity. Airlines worldwide are facing a grim near future as long as the coronavirus continues its march around the world. Scores of aviation meetings and shows have been cancelled or postponed due to the disease. The latest and largest was the Farnborough which was scheduled for July but has since been cancelled. In Singapore, Singapore Airlines said because of the capacity cuts it would be grounding  around 138 of its own planes and that of its unit SilkAir aircraft, out of a total fleet of 147. The airline said the current crisis is the “greatest challenge that the SIA Group has faced in its existence”. SIA also said its low-cost unit Scoot will also suspend most of its network, resulting in the grounding of 47 of its fleet of 49 aircraft. Don Mueang International-Airport is unusually quiet because travellers are cancelling plans to come to Asia. (PHOTO: Shutterstock) Part of Singapore Airlines’ problem is that it is a fully international carrier since there is not domestic market within the island state. The airline said as much when it announced the cuts, saying “the group’s airlines become more vulnerable when international markets increasingly restrict the free movement of people or ban air travel altogether. It is unclear when the SIA Group can begin to resume normal services, given the uncertainty as to when the stringent border controls will be lifted.” A screenshot taken on 23 March 2020 of the COVID-19 tracing website at Johns Hopkins University. To access the live site, click on the image. (PHOTO: Matt Driskill) The collapse in air demand will have a significant impact on the airline group’s revenues and the company said it is working to cut costs, reduce capital expenditures and increase liquidity. The company said it was in talks with plane makers to defer aircraft deliveries, top management and directors were taking pay cuts and the company was considering various methods to reduce labour costs.