The first airline to adopt the world’s largest commercial passenger jet could soon scrap it, under plans from Singapore Airlines (SIA) Group to review the size and makeup of its fleet in the months to come.
During an earnings call made earlier this week, it was made clear that the fate of Singapore’s superjumbo hangs in the balance as the airline looks to reassess its fleet to match a dip in demand.
“The review is likely to lead to a material impairment of the carrying values of older generation aircraft, particularly the A380 aircraft, which would account for approximately $1 billion,” SIA said.
All 19 of SIA’s double-decker jets have been grounded since March – with 13 stored at Changi Airport and another six at the Asia Pacific Aircraft Storage facility in Alice Springs. Singapore was the launch customer for the model in 2007, and has so far retired five of the 24 initially ordered from Airbus.
One representative who spoke at the virtual meeting suggested SIA look to simplify fleet types, leaving the A320CEO, 737-800, B77W and A380 fleets most vulnerable.
Unsurprisingly, the group cited a slump in demand as a catalyst for the decision – with the company also reporting its first annual loss since its founding in January 1972.
On the back of an eye-watering US$730,000 loss, SIA executives said that it may take until March 2021 for the group to “reach less than half of its pre-COVID levels”.
“Progress towards a global lifting of border controls and travel restrictions, which could facilitate or result in the easier movement of travellers between countries, is slower than earlier expected,” the airline added.
SIA expects passenger capacity in August and September to sit at around 7 per cent of pre-pandemic levels.