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SINGAPORE: COVID-19 will change the ways of the jet set world, with health and sanitation concerns likely to remain on travelers’ minds even in a post-pandemic world.
Fulfilling these changes will be among the goals of a new task force established within Singapore Airlines (SIA), its chief executive officer Goh Choon Phong said on Friday (May 15), as the national airline reassesses its operations and plans how it can emerge from the ongoing pandemic.
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“We need to analyze … what kind of travel experience we should offer our clients, knowing that when leaving COVID-19, there will be a lot of health and wellness concern,” Goh said.
“We must ensure that we address the concerns that our customers will have.”
READ: Singapore Airlines records first annual net loss in 48 years after COVID-19 paralyzes demand
READ: COVID-19: Mandatory for SIA, SilkAir and Scoot passengers to wear face masks on board, observe safe distancing
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At the moment, all passengers on SIA, SilkAir and Scoot flights are they must bring their own masks and wear them throughout the flight. They should also observe safe distance measures when boarding and disembarking, as well as when queuing to go to the bathroom.
Airlines and global authorities are still examining other details about what the future of air travel might look like in its practicality and how it can be implemented both on the ground and in the air, said executive vice president of operations Mak Swee Wah.
“(But) it is safe to say that it will not be the same as the situation before COVID,” he added.
In response to a question about whether airline ticket prices could rise with the implementation of safe distancing measures on planes, executive vice president of commercial Lee Lik Hsin said that airfare was “a function of demand and supply “and that SIA will adapt accordingly when it restarts its services.
He added that the effectiveness of social distancing measures on planes “was not yet determined at this time.”
“There are a lot of discussions going on between (the authorities and the airlines) … but it is too early to make an announcement about it.”
READ: COVID-19: Safe distancing on planes and rising ticket prices could be ‘new normal’ for industry, analysts say
Goh and company spokespersons spoke at a virtual results meeting, held a day after SIA reported its first annual net loss.
In the results release, the airline said an internal working group had been established to review all aspects of operations so that it is ready to increase services when air travel recovers.
Presenting more details on Friday, Goh said the working group will have four working groups to spearhead efforts in four areas.
In addition to meeting new travel needs, the task force will examine travel and health regulations established by governments around the world.
Lifting these travel restrictions and border controls is key to SIA operations, the executive director said, adding that the airline will work with the Singapore government and actively participate in other industry efforts.
Other areas of focus include ensuring that your employees have the necessary license and certification by the time you restart operations, as well as working with partners in the supply chain, Goh said.
FIRST ANNUAL ANNUAL LOSS IN HISTORY
As COVID-19 paralyzed travel demand and an unexpected drop in the price of oil led to losses in fuel coverage, the SIA Group reported a net loss of S $ 212 million on Thursday during the 12 months ended 31 December. March, a reversal of the gain of S $ 683 million in the previous year
The double whammy in the first three months of 2020 eroded improvements made in the first nine months of the financial year, it said in its earnings release, sending operating profit for the year that fell 94.5 percent to S $ 59 million.
READ: Singapore Airlines records first annual net loss in 48 years after COVID-19 paralyzes demand
Before the COVID-19 coup, the company’s transformation program, announced three years ago, had been “immensely successful” and was paying off with SIA achieving record levels in revenue, passenger load factor and other areas. in the third quarter.
But amid the severe turmoil caused by the pandemic, the airline has had to cut 96 percent of its passenger capacity through the end of June, a move Goh described as a “very, very drastic” cut.
“We are now operating at a very minimal capacity … and therefore virtually (no) revenue,” he said.
“But at the same time, we have to continue to have expenses to maintain our operating capacity, which means that right now, we are having a loss of cash.”
Since then, the airline has announced a series of cost-cutting measures, such as cut wages for its management team and mandatory unpaid leave for employees in March. Non-core projects have also been deferred, with tighter controls on discretionary spending.
READ: SIA will implement COVID-19 cost reduction measures, up to 7 days of unpaid leave per month for pilots
On the other hand, it has taken measures to shore up its carrying capacity to meet the increased demand for movement of medical equipment and fresh food.
In a move to generate liquidity and shore up its balance sheet, SIA launched a rights issue on March 26 to raise gross income of approximately S $ 8.8 billion through the sale of shares and mandatory convertible bonds (MCBs).
It also has the option to issue up to an additional S $ 6.2 billion through additional MCBs, should the crisis linger and the group needs additional liquidity. Shareholders voted in favor of the fundraiser on April 30.
This move to address liquidity problems early has put SIA in a “strong” and possibly among the “strongest” balance sheet in the industry, Goh said.
SIA is also simultaneously exploring other sources of financing, including secured financing and sale and lease transactions.
The chief executive said the company’s solid balance sheet will put it in a “solid position to negotiate and conclude those deals.”
In the future, COVID-19 will bring with it a “new world” with changes not only in consumer behavior, but also in business travel as more companies adopt telework.
The aviation ecosystem could also see disruptions in supply chains, as well as a shift from distribution channels to online alternatives, Goh said.
Given these expectations, SIA has to change the way it operates despite “no clear visibility” on the trajectory of a recovery and analysts’ expectations of “some market contraction” in the short term, he added.
“Beyond that, there is a general belief that there will be growth at some point,” Goh said.
“We believe there is an opportunity to see all of these different factors and to ensure that when we emerge, we are in a position of strength and, first of all, out of the blocks to be able to lead the industry again.”
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