Singapore Airlines raises $1.5b from sale and leaseback of aircraft to shore up liquidity

Photo: Singapore Airlines's Facebook page

Singapore Airlines (SIA) has raised about S$2 billion (about $1.5 billion) from sale-and-leaseback (SLB) transactions for 11 wide-body aircraft, comprising seven Airbus A350-900s and four Boeing 787-10s, which will help shore up its liquidity at a time when airlines are facing financial challenges arising from a decline in passenger traffic owing to the ongoing COVID-19 pandemic.

An SLB is a transaction in which the owner sells the aircraft, and then takes it back on lease from the buyer. Such a deal typically removes the aircraft, and its associated debt, from the carrier’s balance sheet.

“The airline has successfully raised approximately S$15.4 billion in fresh liquidity since 1 April 2020, including these SLB transactions. The amount also includes S$8.8 billion from SIA’s successful rights issue, S$2.1 billion from secured financing, S$2.0 billion via the issuance of convertible bonds and notes, as well as more than S$500 million through new committed lines of credit and a short-term unsecured loan,” SIA said in a statement on Monday.

“SIA continues to have access to more than S$2.1 billion in committed credit lines, along with the option to raise up to S$6.2 billion in additional mandatory convertible bonds before the Annual General Meeting in July 2021,” the statement said adding that the SIA Group will continue to explore additional means to raise liquidity as necessary.

Globally, the airline industry is expected to report losses of $47.7 billion dollars in 2021, The International Air Transport Association (IATA) said in a recent statement.

Airlines in Asia are among the worst hit by the ongoing coronavirus pandemic.

Singapore Airlines, one of Asia’s largest, faces a daunting challenge to revive its operations amid the pandemic, which has resulted in muted passenger demand, especially for international travel, due to rising number of covid-19 cases and resulting restrictions imposed by several countries.

According to the latest IATA data, overall international passenger traffic plunged 89% in February compared with the same month last year owing to a surge in covid-19 infections.

“The additional liquidity from these SLB transactions reinforces our ability to navigate the impact of the covid-19 pandemic from a position of strength,” said Goh Choon Phong, chief executive of Singapore Airlines.

“We will continue to respond nimbly to the evolving marketing conditions, and be ready to capture all possible growth opportunities as we recover from this crisis,” he added.

The article was first published on livemint.com.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.