SIA Remains Best Capitalised Carrier in the World Even After S$8.1b Spending Since Jun 2020

Last Updated on 2021-03-04 , 9:24 am

Pre-COVID-19 pandemic, SIA was one of the best airline carriers in the entire world.

And now, while they have indeed fallen far from their golden days, SIA remains the best-capitalised airline carrier in the world.

Here’s how they did it.

SIA Remains Best Capitalised Carrier in the World Even After S$8.1b Spending Since Jun 2020

Since Jun 2020, Singapore Airlines (SIA) has spent S$8.1 billion.

Yet, despite the heavy spending, SIA is sitting on around S$5.3 billion in cash, a far cry from some of its competitors such as Emirates, which has to cancel its orders and ask employees over 56 years old to retire.

Since Apr 2020, SIA managed to raise S$13.4 billion in the following ways:

• Rights Issue
• Mandatory convertible bonds (bonds that can converted into common stocks)
• Secured financing on aircraft (where a loan is backed up by collateral)

It’s not just existing cash reserves.

SIA also has the means to get even more money.

They have credit lines worth S$2.1 billion that can be drawn upon and are able to draw an additional S$6.2 billion worth of mandatory convertible bonds to be issued by July 2021.

Cutting Down On Costs

While managing to get fluid cash, SIA was also able to cut down on its spending.

Compared to S$350 million per month from Apr to Sep 2020, SIA only spent about S$400 million over the past two months.

That equates to about S$200 million spent per month.

They’ve also managed to save another S$4 billion by pushing back aircraft delivery dates to after 2023 and amending its plane orders.

Pay cuts took place across the board and a staff rationalisation exercise (a chim way to say reorganisation) was carried out.

Non-essential projects were deferred, discretionary spending tightened and arrangements were worked out with suppliers and partners to reduce costs.

Overall, all of their efforts resulted in operating and capital spending since Mar 2020.

Only South-East Asian Company On Forbes List

To add accolades to this hardy company, SIA was also named as the 34th most admired company in the entire world by Forbes earlier in February this year.

SIA is the only South-east Asian company on the list, and one of the three Asian companies.

To make it even more impressive, SIA ranked ahead of Samsung (49) and behind Toyota Motors (31).

While SIA has dropped from its 28th position last year, the airline says it’s a “recognition of its commitment to product, service and corporate excellence”.

Currently, SIA is operating 7 freight planes and 24 cargo-only passenger flights.

It also has 64 planes on its passenger flight routes and expects to run 25% of its pre-COVID-19 level capacity by the end of April.

On a separate note, SIA is also refurbishing its A-380 planes for an unexpected, but logical reason.

You can find out more here.

Feature Image: Fedor Selivanov / Shutterstock.com (Image for illustration purpose only)