Singapore Airlines is cutting capacity by 96 per cent, grounding almost its entire fleet and imposing cost cuts that will affect about 10,00 staff because of coronavirus travel curbs.
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The global aviation industry is struggling to absorb shocks from the pandemic, with airlines across the world grounding fleets, placing thousands of workers on unpaid leave and seeking state bailouts to survive the crisis..
The measures by SIA, majority owned by state investor Temasek, follow Singapore's decision to close its borders to stem the spread of the virus.
"This will result in the grounding of around 138 SIA and SilkAir aircraft, out of a total fleet of 147, amid the greatest challenge the SIA Group has faced," SIA said on Monday.
Shares in the airline slumped 11 per cent, in a broader market down 7.3 per cent, to close at their lowest in 22 years.
SIA said it has drawn on its credit lines in the past few days to meet immediate cash flow requirements and is in talks with several financial institutions over future funding needs.
UOB Kay Hian analyst K Ajith said that was one positive amid the uncertainty.
"It's important to have access to liquidity, to pay leases, to pay employees and to be able to continue to function. This is a positive, but the cost of funding remains uncertain," he said.
In a memo to staff, SIA chief executive Goh Choon Phong said the airline had agreed with unions on cost-cutting measures, including voluntary unpaid leave for staff up to divisional vice presidents and varying days of compulsory unpaid leave for pilots, executives and associates.
These measures will affect about 10,000 staff, the memo said. SIA had more than 26,500 employees in its last financial year.
In a report issued on Monday before the announcement, UOB Kay Hian said SIA needed "backstop liquidity" of at least $S5 billion ($A5.9 billion) by June.
SIA would not comment specifically on funding plans.
"It is unclear when the SIA Group can begin to resume normal services, given the uncertainty as to when the stringent border controls will be lifted," the airline said.
The cuts are in line with those made by Cathay Pacific Airways, which reduced passenger capacity by 96 per cent in April and May.
Australian Associated Press
