MIAMI – Among news around the airline of Southeast Asia, Singapore Airlines (SQ) reported today that it has reached a deal with Boeing and Airbus to update its aircraft delivery plan. The deal will lead to an extension in the arrival of the airlines’ order book. Thus the delivery stream will distribute over the next five years.
Amid the pandemic, all airlines around the world struggle to overcome the Covid-19 crisis like others. SQ cut around 4300 jobs. Moreover, the airlines’ first-ever loss within 48 years of successful history happened during the pandemic. However, the airline will integrate Silk Air, its independent national arm, from March.
Revised Fiscal Year Expenditure
SQ would delay capital expenditure (capex) of more than US$3 (S$4) billion between FY20/21 and FY22/23 for subsequent years. The group will also “re-calibrate the rate of introduction of capacity, following the disruption to the demand for air travel as a result of the Covid-19 pandemic.” The group said in a statement on Tuesday.
The airline’s updated cumulative estimated capex for FY20/21 stands at S$3.1 billion after the agreements, down from S$5.3 billion earlier. For FY21/22, US$3 (S$4) billion is projected to be the revised amount, down from the previous US$4.7 (S$5.7) billion.
For FY22/23 and FY23/24, the revised gross estimated capex was also lowered by US$150 (S$200) million and US$300 (S$400) million, respectively. On the other hand, the updated number for FY24/25 is US$75 (S$100) million higher than before, at S$4.3 billion.
Goh Choon Phong, CEO of SQ said the agreements are a “key plank” of the group’s strategy to overcome the Covid-19’s disruptions. These agreements will enable SQ to “defer capex and recalibrate the rate at which we add capacity, aligning both the projected recovery trajectory for international air travel.”
SQ stated that the expansion of the aircraft’s delivery schedule enabled it to respond to changes in its projected long-term fleet planning beyond FY25/26. Although the airlines will receive the 1000th Bowing 787-10, it converts 14 Boeing 787-10 into 11 additional Boeing 777-9.
In 2019 issues around premature blade cracking in RR Trent 1000 engines set SQ to ground two of 787-10. As of Feb 9, SQ’s order book consists of 82 Boeing as well as 50 Airbus aircraft.
Featured image: Singapore Airlines 9V-SKW Airbus A380-841. Photo: Brandon Farris/airways