Singapore Airlines reducing capacity by 11 per cent

During the 12-month period beginning this April, Singapore Airlines has said that it will reduce its capacity by 11 per cent, as the demand for air travel demand continues to decline. The major Asian carrier is in talks with unions on how best to cope with the current economic realities.

The airline’s announcement was made on Monday after it posted a decline in quarterly profits of 43 per cent, blamed largely on fuel hedging losses as well as decreased passenger and cargo demand.

“In view of falling demand, as reflected in advance bookings, Singapore Airlines plans to reduce capacity in the coming financial year, by 11 percent from the preceding 12 months,” the carrier said in a statement it released.

Singapore Airlines indicated that it will be decommissioning 17 aircraft from its fleet, an increase over the four planes it had planned to phase out before the financial crisis hit its major markets.

Fifty-five per cent of the airline’s shares are owned by Singapore state investor Temasek Holdings, which had previously announced that the carrier might have to scale back on flights, as well as to reduce capacity.

The airline has already cut flights to a number of destinations throughout Asia due to declining passenger demand.

According to the International Air Transport Association (IATA), passenger traffic worldwide will drop by three per cent in 2009, which will be the first annual decline since 2001. The association is forecasting airline losses of $2.5 billion for the year, meaning that hundreds of thousands of jobs in the industry will be at risk.

Thanks to www.reuters.com for the above quotes, for more information on this article please visit their website.

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