SIA swaps passenger plane orders for freighters

SINGAPORE Airlines (SIA) c6l will replace its fleet of Boeing 747-400F freighters with the newly launched, more fuel-efficient Airbus A350F freighter aircraft.

The national carrier has finalised a purchase agreement with Airbus for 7 of the A350F freighter aircraft at the Singapore Airshow 2022, Airbus announced on Wednesday (Feb 16). This following a letter of intent inked in December 2021 with options for another 5 A350Fs.

It added that the deliveries are scheduled to begin in the fourth quarter of 2025, making SIA the first airline to operate this new generation widebody freighter aircraft.

The freighters, under the agreement, will be delivered in place of 15 A320neo and 2 A350-900 passenger aircraft that are in SIA's order book. This allows the airline group to manage its capital expenditure, while continuing with the essential freighter renewal.

The A350F can carry a similar volume of freight as the Boeing 747-400F, but burns up to 40 per cent less fuel and features a longer range.

The renewal comes as the group reported a record cargo-flown revenue of over S$1.8 billion for the first half of financial year 2022 or up 51.2 per cent, amid capacity crunch in air and ocean freight.

Cargo has cushioned the financial impact of the pandemic on SIA as air travel has been hit.

Goh Choon Phong, SIA's chief executive, said: "The pandemic has underscored the importance of investing in the cargo business, and bolstering the SIA Group's diverse revenue streams. Air cargo also plays a vital role in keeping open global supply chains, especially to transport essential goods during these times."

Freight operations registered a cargo load factor of 76 per cent in January 2022, 13.2 percentage points lower year on year, as capacity expansion outstripped that in loads, according to SIA's operating statistics for the month and released on Tuesday. Load factor is the capacity utilised by shippers.

SIA shares rose S$0.02 or 0.4 per cent to S$5.29 as at the midday trading break on Wednesday.