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SINGAPORE – Passengers will have to adapt to a different travel experience when air travel increases again as regulators and airlines discuss how to make the flight safer, Singapore Airlines (SIA) said.
While the details of how the aviation sector will evolve after Covid-19 are still unclear, SIA has created four working groups to prepare for possible scenarios, it said during a briefing on its financial results on Friday (May 15. ).
Mak Swee Wah, executive vice president of operations, said: “Obviously, the concern now is in safety and health. There are some issues, for example, wearing masks, social distancing and contactless services.
“All of these issues are now being examined to see how practical they are both on the ground and in the air … so sure to say it will not be the same as the pre-Covid situation.”
In response to a question about the fares and whether they will increase due to the social distancing measures implemented in the planes, Lee Lik Hsin, executive vice president of the SIA commercial department, said: “The price of the air ticket is really a function of demand and supply, and we will adapt these curves accordingly as we return to the market and restart our services.
“And on the issue of social distancing in particular on airplanes, the effectiveness of such measures has not yet been determined at this time. There are many ongoing discussions between the various authorities and the airlines … but it is too early to make an announcement. in this.”
SIA had reported a net annual loss of $ 212 million on Thursday for the year ended March 31, the first loss in the airline’s 48-year history.
Its annual operating profit slumped 94.5 percent on-year, as the coronavirus pandemic caused a collapse in air travel demand and a drop in fuel prices.
The sudden change in fortune occurred in the fourth quarter. SIA said it had, in fact, performed well in the previous three quarters, fueled by robust numbers of passenger traffic and business transformation initiatives.
SIA Chief Executive Goh Choon Phong said in the briefing on Friday that it is unclear exactly when and how the industry will recover.
But changes are expected in areas such as consumer behavior and business travel trends.
“No one is sure what the pace of recovery will be and what kinds of regulatory improvements countries around the world will implement to address the need to contain the virus,” Goh said.
To address these issues, SIA has created a Restart Working Group, comprising the four working groups, to examine areas such as travel experience and regulatory development.
Goh said the carrier’s goal is to quickly adapt to the new rules that are being formed. This would allow SIA to emerge from the strongest crisis when the aviation sector finally recovers.
On the current SIA situation, Goh described his 96 percent flight cuts as “very, very drastic,” although he noted that other major airlines around the world have also made significant cuts.
“We are now operating at minimum capacity and therefore virtually no revenue,” Goh said.
Therefore, this required SIA to cut costs while seeking additional sources of financing, with the largest move involving major shareholder Temasek.
SIA is trying to raise up to $ 15 billion by issuing new shares to current shareholders to raise around $ 5.3 billion and issuing mandatory convertible bonds to raise up to $ 9.7 billion.
Temasek, which now owns about 55 percent of the airline, has vowed to take over the remaining unsubscribed shares and bonds.
The move has helped SIA achieve a balance sheet that is among the strongest in the sector, Goh said.
He added: “There is a general belief that there will be growth at some point. So obviously, with all these changes, we will have to change the way we operate as well.
“We believe that there is an opportunity for us to look at all of these different factors and make sure that when we emerge, we are in a position of strength.”
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