The airline will take 17 passenger planes out of its fleet in the fiscal year beginning April until March 2010, it said in a statement this week. The carrier had earlier planned to remove four planes from its fleet of 102 aircraft before the recession deepened – one for conversion to a freighter, and three to be returned to lessors at completion of lease contracts, SIA said in a statement.
The announcement comes only days after the carrier confirmed its cargo unit, Singapore Airlines Cargo, grounded one aircraft – a B747-400 freighter – parking it in the California desert as a result of the plummeting airfreight market. This leaves SIA Cargo with a fleet of 12 B747- 400 freighters still flying.
“The drop in air transportation has been sharp and swift,” said Singapore Airlines CEO, Chew Choon Seng. “Given the falls of over 20 per cent that we have seen recently in air cargo shipments, and the tradition of demand for air travel following closely behind trends on the cargo side of the business, we have to face the reality that 2009 is going to be a very difficult year.
“Singapore Airlines does not have a domestic operation to soften the blow from the slump in international air traffic, and we have to act decisively to address the situation. We have determined the capacity to be operated that will enable the airline to remain viable in a shrinking market, but the removal of surplus capacity will result in redundant resources and will draw sacrifices from every one of us in the company.
“We have already taken action such as expanding and stepping up training and re-training programmes, and we will contemplate retrenchment only as a last resort, but we do not have the luxury of time and we need to agree and act on some measures quickly so that we can push back the point of retrenchment as far as possible and improve our chances of avoiding it altogether.”
The carrier had earlier announced the indefinite suspension of its three-times weekly service between Singapore and Vancouver, via Seoul. The last flight will be on 25 April 2009.
“The decision to suspend service is most regrettable, as Singapore Airlines has served Canada for over 20 years. However the economic conditions and performance on the route has been badly affected by the global economic downturn. The reduction is part of Singapore Airlines continuing commitment to ensure capacity is best matched with demand in the current economic conditions,” the carrier said in a statement.
The carrier said it will continue with efforts in improving efficiency and reducing wastage. Aside from cost containment measures SIA said it is engaging unions on measures that will affect staff. Such measures include accelerated clearance of leave entitlements, voluntary leave without pay, voluntary early retirement and shorter work months. “If there are to be cuts in salary, the management will be the first to take them,” SIA said in the statement.
“The Company will work with the staff and the unions in forging a consensus on the action plans. Together in cooperation, we will rise to the challenges confronting us and ride out the storm,” Chew added.