Singapore Airlines said Tuesday it would defer more than $4 billion ($3.01 billion) of spending on Airbus and Boeing aircraft after reaching agreements with the plane makers to delay deliveries.
The airline will convert 14 of its Boeing 787-10 orders into 11 additional 777-9 aircraft to meet its fleet needs beyond the fiscal year ending March 2026, the airline said in a statement.
“The agreements with Airbus and Boeing are a key pillar of our strategy to address the challenges caused by the Covid-19 pandemic. They allow us to defer capital expenditure and recalibrate the pace at which we add capacity, aligning both with the expected recovery trajectory for international air travel,” said Goh Choon Phong, CEO of Singapore Airlines.
The airline will cut its capital spending plans by $2.2 billion in the 2020-21 fiscal year ending March 31, by $1.7 billion in 2021-22 and by a more limited amount in the following three years, Reuters reviewed.
Singapore Airlines posted a net loss of SGD142 million in the third quarter last week as passenger numbers plunged 97.6% due to the pandemic, although its cargo business held up better in the face of a tight freight market.
The decision to switch some of its orders from Boeing to the 777-9 is a boost for the aircraft maker’s 777X program, but adds pressure to the 787, already plagued by production problems.