SINGAPORE – Covid-19’s grounding of airlines worldwide has ensured that only the fittest and best-supported fliers will survive. With rich government backing, Singapore Airlines Group (SIA) is well-positioned to ride out the turbulence and boost its post-pandemic global market share.
Singapore is now estimated to have the world’s largest number of idle aircraft after global travel restrictions forced SIA to ground 96% of its approximately 200-plane fleet on March 23. With infections sharply rising in the city-state and elsewhere, it is unclear when normal operations will resume.
State investment company Temasek Holdings, which owns 55% of the airline, announced on March 27 a mammoth US$13.27 billion funding package for the national carrier, which is consistently ranked among the world’s best airlines and viewed as integral to maintaining Singapore’s position as an Asian travel and business hub.
The sheer size of the bailout suggests that the road to recovery will be long and difficult. Brendan Sobie, veteran aviation analyst and founder of Singapore-based consulting firm Sobie Aviation, nevertheless sees the rescue package as putting SIA “in a very strong long-term position relative to the overall Asian airline industry.”
Asia is projected to be the hardest-hit by falling airline passenger revenues, according to the International Air Transport Association (IATA), which recently forecast the region will suffer a $113 billion loss in 2020. IATA, which represents some 290 airlines comprising 82% of global air traffic, expects a $314 billion drop in total world carrier earnings this year.
The livelihoods of around 65.5 million people are dependent on the aviation industry, including those in sectors such as travel and tourism, according to IATA’s research, which calculates