Passengers will have to adapt to a different travel experience when air travel resumes, as regulators and airlines consider making flight safer, said Singapore Airlines (SIA).
While the details of how the aviation sector will evolve after COVID-19 are still unclear, SIA has set up four working groups to prepare for potential scenarios, he said during a briefing on Friday’s financial results.
Mak Swee Wah, executive vice president of operations, said: “Obviously, the concern now is for safety and health. There are some issues out there, for example, wearing masks, social distance and contactless services.
“All of these problems are now being examined to see how practical they are both on the ground and in the air … so sure to say, it won’t be the same as in the pre-COVID situation.”
In response to a question about fares and whether they will increase due to the social removal measures implemented on planes, Lee Lik Hsin, executive vice president of the commercial department of SIA, said: “The price of the air ticket is actually a function of demand and supply and we will adapt these curves accordingly as soon as we return to the market and restart our services.
“And on the issue of social distancing especially on airplanes, the effectiveness of these measures is not yet determined. Many discussions are underway between the various authorities and airlines … but it is too early to make an announcement on this . “
SIA had reported an annual net loss of $ 212 million for the year ending March 31, the first loss in the airline’s 48-year history.
Its full-year operating profit plunged 94.5 percent year-on-year as the coronavirus pandemic led to a slump in air travel demand and a drop in fuel prices.
The sudden change of luck came in the fourth quarter. SIA said it had, in fact, achieved strong performance in the first three quarters, driven by solid passenger traffic numbers and business transformation initiatives.
SIA CEO Goh Choon Phong said in Friday’s briefing that he is not sure exactly when and how the industry will recover.
But changes are expected in areas such as consumer behavior and business travel trends.
Read also: Singapore Airlines which requires masks to fly, suspends catering services on some flights
“Nobody is sure what the pace of the recovery will be and what types of regulatory improvements the countries of the world will implement to address the need to contain the virus,” said Goh.
To address these issues, SIA has created a Task Force Restart, comprising the four working groups, to examine areas such as travel experience and regulatory development.
Goh said that the carrier’s goal is to adapt quickly to the new rules that are forming. This would allow the SIA to emerge from the stronger crisis when the aviation sector will eventually recover.
On the current SIA situation, Goh described his 96% flight cuts as “very, very drastic”, although he noted that other major airlines around the world have also undergone major cuts.
“We are now operating at a minimum capacity, and therefore there is practically no revenue,” said Goh.
This therefore required SIA to cut costs while seeking further funding sources, with the most important move involving the main shareholder Temasek.
SIA is seeking to raise up to $ 15 billion by issuing new shares to current shareholders to raise approximately $ 5.3 billion and by issuing mandatory convertible bonds to raise up to $ 9.7 billion.
Temasek, which now owns approximately 55 percent of the airline, has pledged to take on all remaining unsubscribed shares and bonds.
The move helped SIA have one of the strongest balance sheets in the industry, Goh said.
He added: “There is a general belief that there will be growth at some point. So, of course, with all these changes, we will also have to change the way we operate.
“We believe there is an opportunity to look at all these different factors and ensure that when we emerge, we are in a strong position.”
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