Singapore Airlines holds off launch of new First and Business Class seats
Analysts expect carrier to carry out further cost-cutting, including layoffs
Singapore
SINGAPORE Airlines (SIA) will likely see a delay in the launch of its new First and Business Class seats, which were poised to debut on the Boeing 777-9 in 2022, as the American plane-maker pushes back the entry into service of the 777X jets by a year.
With the travel industry in the doldrums, Singapore's flagship carrier is also in talks with the world's biggest planemakers Airbus and Boeing to postpone taking delivery of new aircraft as it seeks to defer capital expenditure.
A recent report by Australia's Executive Traveller highlighted that SIA will no longer be able to introduce its latest premium cabin products by 2022 as initially expected since the launch customers for the 777-9 model, Emirates and Lufthansa, will be among the first to take delivery of the jet in 2022.
The 777X was previously due to enter into service in 2021, already a year later than initially planned after issues with the General Electric engines powering the twin-engine jets.
But as demand for wide-body aircraft plunged following the pandemic, the American plane-maker said last week that it would cut production of jets as well as push back the entry into service for the 777X to 2022. A new version of the 777 workhorse, the 777X comes in two variants, namely the 777-8 and 777-9.
In response to queries from The Business Times, SIA declined to comment on discussions with its partners and suppliers. The premium carrier last rolled out a new regional Business Class seat in 2018 which are deployed on the B787-10s and some A350s, and unveiled refreshed Business and First Class products for its A380s in 2017.
SIA chief executive Goh Choon Phong was previously quoted as describing the upcoming First Class offering as setting a new industry standard.
In addition to the 20 Boeing 777-9 aircraft it has ordered, Singapore's flag carrier also has 19 Airbus A350s and 29 Boeing 787-10s on order.
The spokeperson for SIA added: "We continue to engage aircraft manufacturers to negotiate adjustments to the delivery stream of existing aircraft orders and the schedule of progress payments to reduce near-term cash outflows."
The spokesperson said that while it has reached an agreement with Airbus on some matters, talks with Boeing are ongoing. Boeing declined to comment when contacted by BT.
As border closures and fresh waves of the virus stymie the prospect of a recovery for air travel, battered airlines worldwide have announced cost cutting measures, including salary cuts, furloughs and lay-offs.
The International Air Transport Association expects that it could take up to four years for travel to return to pre-Covid levels. SIA, which is hit particularly hard due to the lack of a domestic market, has projected it will only operate under 50 per cent of its pre-Covid capacity by the end of the current financial year in March 2021.
For the three months ended June 30, 2020, SIA unveiled a massive loss of over S$1 billion, and is introducing steeper salary cuts for management and staff, as well as an early retirement scheme for pilots and ground staff.
"Given the slower growth trajectory and depressed market conditions, we must brace for additional staff measures," said Mr Goh last week in a message to employees, which was seen by BT. "We will be engaging our staff unions on this."
With recovery proving elusive, industry watchers have not ruled out job losses at Singapore's flag carrier, should the pandemic drag on.
Shares in SIA closed S$0.06 higher on Tuesday, at S$3.37.
