Singapore Airlines, the flag carrier airline, is reportedly examining the option to leaseback and sell some of its aircrafts with an aim to raise more money. This move is expected to deliver the much-needed cash to the airline, without a considerable increase in the overall long-term costs. The airline is also reportedly seeking to maintain flexibility with its fleet of aircrafts.
Currently, the airline has a fleet of nearly 130 aircrafts, with additional 70+ aircrafts operating under Scoot and SilkAir, its subsidiaries. The older leased aircrafts of the airline are making their way out in favor of the newer aircrafts. For instance, Airbus A350-900, Boeing 787-10, & future Boeing 777X, will aid in replacing planes such as older Boeing 777s and Airbus A330. These next-gen, newer planes are highly fuel-efficient as well as deliver more flexibility to the Singapore Airlines.
By partnering with a leasing company, the airline could enter a deal on a few planes, which would offer much-needed cash, though it could potentially raise the expenses of the airline in the long-term.
The airline needs to weigh the long-term fleet plans to enter a sale-and-leaseback agreement. The 777 aircrafts are not ideal candidates for this, leaving aircrafts such as Boeing 787-10s and Airbus A350s. It has ordered and will continue to order both types of aircrafts. The record from the latest deliveries and orders from Airbus has revealed that the manufacturer has delivered 48 A350s out of 67 on order. The American manufacturer also has reportedly delivered 15 787-10s out of 44 orders from Singapore Airlines.
These newer and younger aircrafts require less maintenance service and thus result in low operating costs. Additionally, large orders of both these types reveal that the airline is committed to the next-gen fleet and offering additional stability for the lessors. Other Singaporean airlines also have entered the agreement to raise cash. For instance, United Airlines, the fellow Star Alliance carrier, also has recently entered a sale-and-leaseback agreement with BOC Aviation based in Singapore.