Singapore Airlines is ready for the bounce back from COVID-19 with A380s and 777X according to its EVP Commercial Lee Lik Hsin.
Speaking with AirlineRatings.com Mr. Lee said Singapore Airlines, has shareholder approval to raise over S$15 billion in equity, cash, and facilities and is well-positioned to ride out the pandemic as it prepares for the return of mass travel with the A380 superjumbo as its flagship.
Mr. Lee said the airline was probably the “best positioned in the world” despite a S$300 million a month cash burn and is moving ahead with aircraft upgrades and deliveries of new types, such as the 777X.
To date the airline has raised S$12.7 billion through rights shares, mandatory convertible bonds, secured financing, convertible bond issue to private investors, a regular bond issue to private investors and committed lines of credit, and a short-term unsecured loan.
The airline’s position is quite remarkable given that it is an international carrier with a host of border restrictions impairing travel.
The financial strength and mainly equity infusion has meant that only 2000 of the group’s 23,000 staff have been made redundant.
Singapore Airlines also has the option of sale-and-lease-back of much of its fleet as another backstop.
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Mr. Lee says the airline is rebuilding its network slowly.
“In terms of network, we are still far below pre-COVID at around 20 percent as of January of next year, however in terms of destination coverage, we are actually at about 40 percent,” Mr. Lee said.
“That’s not insignificant considering the circumstances and we want to still be able to provide global connectivity.”
Mr. Lee says that travel bubbles and long-range green lane routes are the way forward in the short term as mass travel is a way off as the shorter-term impact of the vaccine and COVID-19 testing on travel is unknown.
“It is still, very early days on how governments view the vaccine as a potential platform or mechanism with which they can feel more assured about border opening.”
Mr. Lee adds that while it is not up to the airline to mandate vaccination, “proof of having the vaccine and a COVID-19 test becomes another platform with which governments would be encouraged to open borders.”
And when “mass travel” returns front and center of the Singapore Airlines fleet will be 12 Airbus A380s, reduced from the pre-COVID roster of 19.
“We believe in the A380 as part of our future fleet, just a slightly different proportion because we still want to maintain 12 of them in our long-term fleet, Mr. Lim said.
And those 12 are being upgraded to the new award-winning configuration, with only 3 left to be completed.
Singapore Airlines is also committed to Boeing’s latest jet the 777X which it has 20 on order.
The 777X is expected to be certified late next year with the airline looking to introduce them from around 2023 as per schedule.
“Our intention is to bring them in on schedule as best we can, Mr. Lim said.
Once passengers are on board their Singapore Airlines flight they are are in for some surprises says Mr. Lim.
“What we’re most proud of is some of our digital initiatives, which have allowed for reduced contact and reduced touch in the cabin.
“In particular, we’ve gone totally digital in-flight with regards to menus, reading materials and we even have an APP that you can use on your phone to control the entertainment system.
“So you don’t have to touch a console and you don’t have to touch a screen to watch your movies,” Mr. Lim said.
Going forward the airline is focused on a network rebuild with new routes off the radar.
“Certainly at this time, it will be difficult to contemplate completely new routes because market development during such situation will be quite challenging,” Mr Lee said.
