Singapore Airlines Ltd has secured up to $A21 billion in funding to help see it through the coronavirus crisis and expand afterward, in a sign of confidence travel demand will eventually return.
As many carriers around the world look for cash to weather the crisis, Singapore Airlines' majority shareholder, state-fund Temasek Holdings, said it would underwrite the sale of shares and convertible bonds for up to $S15 billion. Singapore's biggest bank DBS Group Holdings Ltd provided a $S4 billion loan.
"This transaction will not only tide SIA (Singapore Airlines) over a short term financial liquidity challenge, but will position it for growth beyond the pandemic," Temasek International Chief Executive Dilhan Pillay Sandrasegara said.
"The delivery of a new generation aircraft over the next few years will provide better fuel efficiencies as well as meet its capacity expansion strategy."
For the time being, the airline, a major customer for Airbus SE and Boeing Co, has cut capacity by 96 per cent and grounded almost its entire fleet after the Singapore government banned foreign transit passengers, the lifeblood of the hub carrier.
Some other financially strong carriers are also banking on a return to more normal times once the pandemic has passed, such as Australia's Qantas, which is continuing with costly plans to refurbish the interiors of its fleet of 12 grounded A380 superjumbos.
US airlines are preparing to tap the government for up to $25 billion in grants to cover payroll, even after the government warned it may take stakes in exchange for bailout funds.
After the US House of Representatives approves the airline bailout and President Donald Trump signs it as early as Friday, airlines are to receive initial payments within 10 days.
European leaders overwhelmingly agreed on Thursday to suspend a rule requiring airlines to use at least 80 per cent of their flight slots to keep them the following year.
Meanwhile China, which had been showing some early signs of a recovery in flight capacity, on Thursday ordered airlines to sharply cut the number of flights in and out of the country out of concern infected travellers from overseas could reignite the coronavirus outbreak that paralysed the country for two months.
Australian Associated Press
