SIA group mothballs four more planes in Australia, taking total tally to 22

Singapore

WITH international travel still largely on hold, the Singapore Airlines (SIA) group has stored four more aircraft Down Under, taking the number of planes parked in Australia to 22.

In recent days, the group has sent two double-decker Airbus A380s belonging to the parent airline and two Boeing 787-8 planes owned by budget arm Scoot to the Asia Pacific Aircraft Storage facility in Alice Springs, The Business Times has learnt.

"The Covid-19 outbreak has resulted in significantly reduced demand across the aviation industry. Singapore Airlines has parked a large number of its aircraft at Changi Airport, with a few aircraft parked overseas," said an SIA spokesperson.

"The aircraft are parked in locations where they can be appropriately maintained during this period. We will continue to monitor the situation and, when appropriate, will return the aircraft to Singapore ahead of reintroducing them to our operations."

Global travel demand has been ravaged by the Covid-19 pandemic, paralysing airline operations worldwide and sending carriers scrambling to shore up funds. According to the International Air Transport Association, air traffic may not rebound to pre-Covid levels until 2024, with domestic travel to recover ahead of international travel.

SIA has raised some S$10 billion in liquidity, S$8.8 billion of which came from a rights issue. In addition, the Temasek-backed airline group has the option to raise a further S$6.2 billion through mandatory convertible bonds.

"We continue to monitor the situation before making a decision regarding the parking of our aircraft," the SIA spokesperson added, in response to a query on whether more planes would be headed to Alice Springs in the near term. For July, Singapore's flag carrier will operate just 6 per cent of its original passenger capacity, while only 25 planes of its 200 strong group-wide fleet are being deployed for passenger services presently.

However, the group is using 30 passenger aircraft for cargo-only services to complement its seven freighters under its cargo arm. This comes as the grounding of passenger aircraft by airlines worldwide has resulted in reduced cargo capacity as a result of the loss of belly cargo operations.

Some market watchers reckon more of the mammoth A380 jumbo jets - which are less fuel efficient compared to next generation aircraft in SIA's fleet - could be stored. Of the 22 planes currently on the ground in Alice Springs, seven are A380s; SIA has a total of 19 A380s in its fleet.

The group has also stored three Boeing 777-200ERs from the parent airline as well as four Airbus A320s and two Boeing 787s from Scoot in Australia.

The remaining six of the 22 aircraft are SilkAir's Boeing 737 MAXs that were sent to Australia in late September last year after two fatal crashes prompted a worldwide grounding of the jet. The dry weather in Australia's Northern Territory is generally better for aircraft storage vis-a-vis Singapore's wet and humid weather.

The liquidation of Thailand's Nok-Scoot - a joint venture between Scoot and Nok Air - will mean that a total of seven Boeing 777-200 aircraft leased by SIA to the loss-making low-cost carrier will have to be returned. Some of these aircraft are also likely to be stored, sources say.

In response to queries, the SIA spokesperson said: "We are progressively taking back the Boeing 777-200 aircraft as NokScoot does not have the ability to make lease payments. We will make a decision on the aircraft in the near future." Three of them were due to return to SIA by the end of June.

SIA announced previously that it would record a one-off charge of S$123.6 million for the first quarter ended June 30, comprising a S$106.9 million charge owing to the impairment of SIA's book value of the seven B777-200s and S$16.7 million in provisions by Scoot to cover its share of liquidation and related costs.

SIA shares closed eight cents higher at S$3.81 on Wednesday, up 2.15 per cent.