For Emirates employees, it was a week of one step forward and two steps back. On a positive note, Emirates…
Singapore Airlines Set to Receive State Aid
Singapore’s Finance Minister Heng Swee Keat announced on Thursday that the carrier is considering a corporate action with the support of Temasek Holdings, its state-owned majority stakeholder.
Heng also stated that the action “will be announced in due course.”
“We will make sure SIA comes out of this in good shape. Ultimately, this is about preserving our air hub for it to emerge stronger from this crisis,” Keat added.
In the early hours of Thursday, SIA stock trading was halted in an anticipation of the announcement Keat made. Last Monday the carrier’s stock hit its 21-year-low value of 5.35 Singapore Dollars, but with the growing rumors of a state bailout, it jumped to 6.50 Singapore Dollars. In January, the company’s shares were traded around 9.11 Singapore Dollars.
As a part of a bigger stimulus initiative, the state is to cover 75 percent of all aviation industry employee’s wages. The amount of that relief is 15 billion Singapore Dollars, around 10 billion USD.
As part of sweeping cost-cutting, SIA has deferred aircraft deliveries, instituting salary cuts for management and rolling out unpaid leave. Currently, 96 percent of the carrier fleet is grounded: 185 of its 196 aircraft will be preserved until the crisis recedes.
In a statement, Singapore Airlines said it was “unclear” when it would begin to resume normal services “given the uncertainty as to when the stringent border controls will be lifted.”
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