Singapore Airlines (SIA) has managed to defer over $4 billion of capital expenditure (capex)between FY2020/2021 and FY2022/2023 to later years, announced the group on Feb 9.
The group has reached agreements with Airbus and Boeing to revise its aircraft delivery schedule which means some of the aircraft in SIA’s order book will be delivered over a longer period that originally contracted.
The delivery stream will be spread out beyond the immediate five years.
In addition, SIA has also been able to respond to changes in its projected long-term fleet needs beyond FY2025/2026 with the conversion of 14 Boeing 787-10 aircraft into 11 additional Boeing 777-9 aircraft.
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Following this, the projected capital expenditure over the period of FY2020/2021 to FY2024/2025 has been reduced to between $3.1 billion to $4.5 billion, from $4.2 billion to $5.7 billion previously.
“The agreements with Airbus and Boeing are a key plank of our strategy to navigate the disruptions caused by the Covid-19 pandemic. They allow us to defer capital expenditure and recalibrate the rate at which we add capacity, aligning both with the projected recovery trajectory for international air travel,” says SIA’s CEO Goh Choon Phong.
“At the same time, they retain our commitment to operating new generation aircraft that will enable the SIA Group to continue offering greater comfort and innovative products to customers, further drive operating efficiency, and support ongoing efforts to materially lower our carbon emissions. These will help to cement our leadership position in the airline industry as it recovers from the pandemic,” he adds.
Shares in SIA closed 6 cents higher or 1.4% up at $4.39 on Feb 9.
