Singapore Airlines cut its cargo capacity by 20% as global economic slowdown led to persistent weakness in demand and high jet fuel prices piled pressure on its profitability, reported Reuters.
“Cargo demand over the last year has been very weak. Airlines are still running their cargo schedules a little too high and load factors have been falling for some time now,” said Andrew Orchard, an analyst at RBS.
“Twenty percent is quite a hefty amount. SIA has seen their cargo (business) hold up better than some of their peers, like some Chinese airlines. So it’s a little surprising that they’ve decided to take such a drastic step.”
SIA Cargo, which operates 13 Boeing 747-400 freighters, said the capacity reductions were implemented recently and would continue into the northern summer operating season which starts late next month.
The carrier has reported operating losses in the past three quarters.
“With no improvement expected in the first half of this calendar year, and with stubbornly high fuel prices pushing up costs, we have taken appropriate action to reduce our freighter operations to better match capacity to demand,” SIA cargo president Tan Kai Ping said in a statement on Wednesday.
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