Today, Singapore Airlines has said that it will reduce its workforce by over 4,000 employees. The airline, feeling the effects of COVID-19, plans to become a smaller carrier. It will accomplish its staff reductions through layoffs and hiring freezes over an undefined period.
Singapore to shrink its workforce
Despite more people choosing to travel than those that have in recent months, air travel is still low. Airlines are struggling to ramp up demand for tickets where coronavirus still poses questions surrounding travel restrictions.
Feeling the brunt of the outbreak, Singapore Airlines has recently said that it plans to shrink its workforce. The airline is planning to remove 4,300 staff to cut costs and work to become a smaller airline.
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2,400 employees are existing Singapore Airlines staff members who will be laid off. A further 1,900 people will remove themselves from the airline as a result of voluntary departures or hiring freezes. This figure represents a 15% cut to the Singapore Airlines workforce.
According to a statement seen by Reuters, the CEO of Singapore Airlines, Goh Choon Phong, reassured that,
“[This decision] is not a reflection of the strengths and capabilities of those who will be affected, but the result of an unprecedented global crisis that has engulfed the airline industry.”
Becoming a smaller airline
To manage uncertainty around travel demand, Singapore Airlines is reducing its operation. It’s a tactic that has been carried out by many airlines with unfortunate knock-on effects. For Singapore Airlines, it won’t just be a shortage of staff. The airline also plans to reduce its fleet.
According to Planespotters.net, the airline owns 131 aircraft in its fleet. It is a young, Airbus-dominated collection of planes with a hopeful future.
Singapore Airlines has:
- Eight Airbus A330-300;
- 48 A350-900 XWB; and
- 19 A380-800.
In addition, it has Boeing 777s and Boeing 787-10 Dreamliners. This varied fleet has previously allowed the airline and its subsidiaries, Scoot and SilkAir, to operate in 130 destinations around the world. However, that will now change.
Struggling to fill its flight schedule
Like many airlines, Singapore Airlines has needed to adjust its flight schedule. That said, the percentage of scheduled upcoming flights is well below the volume operating in 2019.
This month, the airline has just 7% of its scheduled 2019 services planned. For October, it doesn’t look much better. Only 8% of scheduled 2019 flights will happen next month. By November, just 11% of its scheduled flights will be up and running.
In terms of revenue and bouncing back from the pandemic, this creates a problem. However, it’s the nature of Singapore’s airline industry that will hinder its flag carrier. Singapore does not have a robust domestic market. It’s too small to make that a reality. Where some other airlines have been able to rely on strong domestic connections – think the United States – Singapore in hindered.
To get itself up and running, it needs international leisure tourism and business travel. Yet, where borders are still closed or entry restricted, that could be difficult.
For now, Singapore Airlines is relying on a handful of routes to bring its revenue. These include services between Singapore and:
- Hong Kong;
- Los Angeles;
- Sydney; and
Its total destinations cover 34 cities on four continents.
How do you think Singapore Airlines will bounce back from COVID-19? Share your thoughts on this in the comments.