Singapore Airlines cuts all but a handful of flights through April

Singapore — Singapore Airlines Group said Monday it was cutting 96% of its capacity through the end of April in the wake of travel restrictions around the globe as countries struggle to contain the spread of the COVID-19 pandemic.

It will ground 138 aircraft out of a combined fleet of 147 for Singapore Airlines (SIA) and regional unit SilkAir. Meanwhile, the company's low-cost unit Scoot will ground 47 of its fleet of 49 aircraft, the company said.

On March 17, the company had said it would operate 50% of its capacity through April.

"We have lost a large amount of our traffic in a very short time, and it will not be viable for us to maintain our current network. Make no mistake, we expect the pace of this deterioration to accelerate," SIA CEO Goh Choon Phong said in an earlier statement.

"The SIA Group must be prepared for a prolonged period of difficulty," Goh said.

Calling the coronavirus outbreak "the greatest challenge that the SIA Group has faced in its existence", the carrier said it was unclear when it could resume normal services given the uncertainty.

In addition to capacity cuts, the carrier has taken other measures to build liquidity and reduce capital expenditure and operating costs. That includes ongoing discussions with aircraft manufacturers to defer upcoming aircraft deliveries, salary cuts and voluntary no-pay leave scheme.

JET FUEL DEMAND TAKES ANOTHER BLOW, DRAGS DOWN PRICES

The recent wave of flight cancellations by regional airlines including Singapore Airlines, Hong Kong-based Cathay Pacific and UAE's Emirates led the Asian jet fuel complex on a downward spiral.

At the Asian close Monday, the outright price of FOB Singapore jet fuel was assessed at $25.35/b -- the lowest level since March 8, 2002, S&P Global Platts data showed.

In the derivatives market, the front-month April jet fuel/kerosene swap hit its lowest level in 17 years at $27.68/b. The last time the front month swap was assessed lower was $27.40/b on May 29, 2003, Platts data showed.

"The jet fuel market in Asia is so weak now. Demand everywhere is low for sure, and traders cannot move cargoes anywhere as freight is so expensive now," a refining source said.