Singapore Airlines cuts capital spending by at least 12 per cent

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New forecast of S$5.3bn or less by year ending March 31, 2021, compares with a S$6bn figure before the coronavirus pandemic

Singapore Airlines Ltd will cut capital spending by at least 12 per cent from its previous plan this financial year, with the final reduction to be determined by talks with plane makers over delivery delays.

The new forecast of S$5.3bn or less by the year ending March 31, 2021, compares with a S$6bn November figure before the coronavirus pandemic.

Singapore Airlines reported its first-ever annual loss this week, citing poor fuel hedging bets and the collapse in demand due to the coronavirus pandemic, saying the timing of any recovery was uncertain.

Regional rivals Cathay Pacific and Qantas Airways are among the global carriers looking to push back the delivery of new aircraft as they come to terms with the fall in demand.

Singapore Airlines said it does not expect to fly at its pre-pandemic capacity for at least 12 to 18 months. It plans to retire its Boeing Co 777-200ERs earlier than expected and will not renew its eight Airbus SE A330 leases, which will expire in the next 12 to 14 months.

Singapore Airlines and regional arm SilkAir have cut 96 per cent of passenger capacity through the end of June, and low-cost arm Scoot has cut 98 per cent.

The company said its cargo capacity had suffered less, dropping 60 per cent because it was maximising the use of its freighter fleet.

Air freight rates have risen sharply as airlines have cut back on passenger capacity. In normal times, around 50 per cent of air cargo is carried in the belly of passenger planes.

 

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