Recovery in international air travel slower than expected

David Lim, general manager (India), Singapore Airlines


David Lim has been overseeing India operations for Singapore Airlines since April 2016. A Singaporean, Lim graduated from the National University of Singapore and has spent more than three decades with the company, in various capacities within passenger and cargo service operations. His overseas assignments have spanned across cities such as Berlin, London, Hong Kong, Copenhagen, Zurich and Tokyo. Singapore Airlines, which recently completed 50 years in India, is undergoing challenging times because of the Covid-19 pandemic. The airline suffered a net loss of $815 million in Q1 of FY21. Conditions continue to be gloomy for the aviation sector in India and globally. In an exclusive interview with THE WEEK, Lim talks about the challenges for the airline and the road ahead. Excerpts:

SIA is operating at about 7 per cent of passenger capacity.
Our senior management has proactively taken pay cuts.
We remain committed to our relationship with Vistara.

What has been the scenario in the airline segment, especially with regard to your operations from India, since the Covid-19-induced lockdown started?

The nationwide lockdown in India coupled with the imposition of the international flight ban brought all domestic and international commercial passenger flight operations to a standstill. However, with the country slowly opening up, we have revived our cargo operations and are currently operating passenger aircraft carrying cargo to and from India. However, the global aviation scenario is still highly uncertain as there is no clarity about when travel restrictions will be eased and international borders will start to open up. Pre-Covid and before the international flight ban was imposed in India, the SIA group, which includes Singapore Airlines, SilkAir and our low-cost arm Scoot, offered over 140 weekly services from India to Singapore.

What about your relationship with Tata Sons regarding Vistara? How is that relationship growing and where does it stand today?

Vistara is a strategic investment for us in India, which is one of the world’s fastest growing aviation markets. We remain committed to our relationship with Vistara.

What measures have you taken to deal with the situation, including cost optimisation measures?

Currently, SIA is operating at about 7 per cent of passenger capacity compared with January. We will continue to adjust our capacity to match the demand. We have also deferred non-essential expenditure projects and imposed tight controls on discretionary expenditure and are in negotiations with aircraft manufacturers to try and adjust our delivery stream for aircraft orders placed in the past.

Additionally, our senior management has proactively taken pay cuts since March 1, with pay cuts of 20-35 per cent from April 1. Directors have also taken a 30 per cent cut in their fees to show solidarity with the management and staff. Further measures include varying days of compulsory no-pay leave every month for pilots, executives and associates, as well as furlough for staff on re-employment contracts. These measures have been taken in addition to a hiring freeze, voluntary no-pay leave schemes and an early retirement scheme.

What is the current status of your operations? A major chunk of your traffic is to the US and Australia from India?

This remains a highly challenging time for the Singapore Airlines Group. While there are some bilateral moves to create travel bubbles or green lanes, their impact on air travel and the pace of any recovery in demand remains highly uncertain. Globally, Singapore Airlines and SilkAir have increased the frequency of selected services in their passenger network in August, September and October, and reinstated flights to Cebu, Istanbul, Milan, Perth, Phnom Penh (Cambodia) and Taipei. By the end of October, the group’s passenger capacity will reach approximately 8 per cent of its pre-Covid-19 levels.

By when do you see a revival happening?

The recovery trajectory in international air travel is slower than initially expected. Industry experts, including International Air Transport Association and International Civil Aviation Organization, 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. Progress towards global lifting of border controls and travel restrictions, which could facilitate or result in the easier movement of people between countries, is slower than earlier expected. As a result, international passenger traffic remains low.