Singapore Airlines (SIA) has reportedly made revisions to existing aircraft delivery agreements it has with aircraft makers Airbus and Boeing, to postpone aircraft deliveries accounting for over $4 billion of capital expenditure between FY 2020-21 and FY 2022-23 to later years. The move reportedly comes amid a sluggish travel market owing to shuttered borders in the wake of the COVID-19 pandemic.
According to Goh Choon Phong, the Chief Executive of SIA, the agreements with Boeing and Airbus are a vital plank of the company’s strategy for navigating the disruptions caused by the SARS-CoV-2 pandemic. Phong further stated that these agreements enable the airlines to delay its capital expenditure and recalibrate the rate at which capacity is added, aligning both with the estimated recovery trajectory for international travel.
For the record, SIA incurred a net loss of $142 million in the last quarter of 2020, as compared with a net profit of $315 million during the same period in 2019. However, the latest figures depict a considerable improvement on the massive $2.34 billion loss during the July-September period.
The company’s Q2 results also recorded immense impairment write-downs in light of the coronavirus pandemic. SIA’s revenue over the third quarter was $1.07 billion, amounting to less than a quarter of the $4.47 billion a year earlier, but an improvement of $783.8 million on the turnover during the second quarter.
As per Phong, the agreements will enable SIA to retain its commitment to operating new generation aircraft that would allow the airlines to be consistent in offering innovative products and greater comfort to customers. This would help in driving the company’s operating efficiency and supporting ongoing efforts for the material reduction of its carbon emissions.
It is to be noted that SIA is also revamping its orders for 14 B787-10 to 11 B777-9s. These are bigger airplanes that would ultimately replace the company’s ageing B777-300ER and A-380 jets. Down from the earlier 135, SIA currently has 132 planes in order. These comprise 82 from Boeing and 50 from Airbus.