SINGAPORE – Singapore Airlines (SIA) is considering corporate action supported by Temasek Holdings, amid the current coronavirus outbreak, Finance Minister Heng Swee Keat said on Thursday (March 26).
“I welcome Temasek’s decision to lend support to SIA. SIA is an outstanding airline and strategic asset for Singapore,” Mr Heng told Parliament on Thursday when he unveiled the Resilience Budget to provide a second round of measures to help firms and individuals affected by Covid-19.
“Through the government support for the aviation sector, and if necessary more direct support measures, we will make sure that SIA is able to come through this in good shape,” he said.
Mr Heng added: “The SIA group sits at the heart of our aviation system and anchors our position as an air hub. In 2019, SIA accounted for over half of passenger traffic and cargo tonnage in Singapore.
“As the main hub carrier, SIA links us to the rest of the world. Many foreign airlines choose to come to Changi because they can tap on SIA’s connectivity to the rest of the region.”
He said: “A diminished SIA will undermine our air hub’s ability to recover from the crisis. Air travel will eventually resume when Covid-19 comes under control. Until then, SIA will need liquidity to tide over this outbreak.”
In this regard, SIA will benefit from the enhanced Jobs Support Scheme and the enhanced Aviation Support Package which will help reduce its operating expenditure, he said.
The airline has announced that it will slash 96 per cent of its capacity as countries, including Singapore, tighten their borders.
Analysts have suggested that SIA could receive support in the form of a working capital loan or subsidies.
SIA called for a rare trading halt pending an announcement on Thursday morning, days after it said it would ground almost its entire fleet and seek more financing as it grapples with the coronavirus pandemic.
The airline did not provide details to the stock exchange on the topic of the planned announcement.
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