The fate of Singapore Airlines' flagship Airbus A380s will be decided in the next three months following an extensive review of both the size and shape of the airline's network, and the jets needed to fly it.
After revealing a staggering $1bn loss in the April-June 2020 quarter, at a time when the airline's parent group SIA – which also comprises regional carrier SilkAir and low-cost operator Scoot – saw a 99.5% drop in passenger traffic due to the Covid-19 pandemic, the stage is set for an unsteady and drawn-out recovery.
Even by the end of March 2021, "the Group’s passenger capacity may reach less than half of its pre-Covid-19 levels," the airline said in a statement.
In an effort to right-size itself to suit the long years ahead, the company said "we are reviewing the potential shape and size of our network over the longer term given COVID-19 and its impact on our passenger traffic and revenue, which will provide better clarity on the fleet size and mix that the group will need."
Some of this will hinge on delaying the delivery of new aircraft "to reduce near-term cash outflows," the airline said. "We have reached an agreement with Airbus on some of these matters and discussions with Boeing are ongoing. This will help to moderate fleet growth in the near term."
Singapore Airlines is believed to have some 90 jets on order, compared to around 120 already in its fleet, with another 60 orders shared between SilkAir and Scoot
The subjects of those discussions will include the Airbus A320neo and A321neo, the Boeing 737 MAX, the Boeing 787 Dreamliner and the Boeing 777-9: the later of which has already been pushed back until 2022 and is set to be the launchpad for Singapore Airlines' latest first class suites and business class seats.
But this still leaves a superjumbo-sized question mark hanging over the Airbus A380.
All 19 of the airline's double-decker juggernauts have been grounded since March, with 13 parked at Changi Airport while six – a mix of older and newer versions – now reside at the longer-term Asia Pacific Aircraft Storage facility in Alice Springs, where the arid climate and low humidity helps keep aircraft in top condition until they're ready to fly again.
Singapore Airlines has already flagged that its fleet review "is likely to lead to a material impairment of the carrying values of older generation aircraft, particularly the A380 aircraft which would account for approximately $1 billion."
Singapore Airlines was the prestigious launch customer for the Airbus A380 in October 2007, and from December 2017 added a second tranche of newer A380s sporting upgraded first and business class designs.
However, Airbus is winding down production of the A380 - the final superjumbo is now being assembled, despite questions over if customer Emirates intends to even pick up the keys – and other airlines around the world have stood down the A380 as being simply too large a plane to fill with passengers at a time when few people are flying.
"The recovery trajectory in international air travel is slower than initially expected," Singapore Airlines admits.
"Industry experts have continued to revise downwards their projections for the recovery of global passenger traffic in the near term. Industry forecasts currently expect that it will take between two to four years for passenger traffic numbers to return to pre-pandemic levels."
Air France has already announced it will scrap its 10-strong A380 fleet, while Lufthansa will decommission six of 14 A380s.
Qantas has mothballed all 12 of its A380s until at least 2023, and warns that as few as half may return to the skies. Qatar Airways has stated that its A380s "will not return for at least a year, maybe never."
Emirates, however, remains bullish and says it hopes to have all of its 115 A380s flying again by early 2022.
"The A380 has defined us," Emirates President Sir Tim Clark says of the planned superjumbo surge. "As demand returns, and given the slot availability at prime hubs, there will be a place for it. I’m hoping by April 2022, all our A380s will be flying again."