Singapore Airlines has cancelled orders for eight Boeing 737 Max 8s and converted three on-order 787-9s to the larger -10 in its latest reshuffle of its group orders. "These adjustments are in line with the group’s long-term fleet renewal strategy, and support its projected operational requirements," the carrier states. In an analyst briefing executive vice-president for finance and strategy Tan Kai Ping described the decision for the 787 type swap and Max 8 cancellation as "completely network driven", adding that the upgauging to the -10s enables it to increase seat count on certain routes. "So [it's] just our view of how we think demand will evolve, and how we think then we need to evolve the network," he says. Fleets data shows that SIA operates 16 787-10s, and prior to the announcement, had seven more on order and options on six more. The original 787-9s on order that are being converted to -10s are coming from Scoot's orderbook, which will now reduce to three 787-8s and one -9. The budget carrier has 10 787-8s and 10 787-9s in service. The data shows that SIA has 16 737 Max 8s and seven 737-800s in service, while two more -800s are listed as stored. Of the Max 8s, 10 are owned unencumbered by the airline, and six are on operating leases from BBAM. With the latest adjustments, SIA says that the mainline carrier's orderbook, including options, is now comprised of three Airbus A350s, 15 787-10s, 31 777-9s, 13 737 Max 8s and seven A350Fs. Scoot's also holds orders for 12 A320neos, six A321neos and nine Embraer 190-E2s. SIA is considering options to buffer against the expected delivery delays of its 777-9s, chief executive Goh Choon Phong says, including extended leases on existing aircraft and operating its older 777-300ERs past their planned retirement dates. "Those we determine to be sufficient to mitigate that deferred delivery of 777-9s," he says. The delivery delay will see it push back introduction of its new cabin product on board the 777-9s to 2025. "As part of conversations with our OEMs, we're also looking at how we want to re-arrange the deliveries of various aircraft types to better match our outlook on how recovery will come," Goh adds.

Singapore Airline Group's budget subsidiary Scoot is outpacing the mainline carrier in capacity recovery, having restored 90% of pre-Covid capacity in May. This compares with Singapore Airlines' 79% of pre-pandemic capacity in ASK terms. Disclosing the figures during an analyst briefing on 17 May, the group noted that the budget unit had accelerated following the easing of border restrictions in the region. Scoot's capacity recovery versus pre-Covid levels had been lower than SIA's amid the pandemic, as long-haul destinations began reopening ahead of regional one. Capacity recovery only gained momentum towards the end of 2022, surpassing the mainline's in November and sharply increasing from March. The low-cost carrier plans to introduce nine 112-seat Embraer 190-E2 jets to its fleet from 2024 to enable it to expand on "thinner routes to non-metro destinations out of Singapore". As a group, SIA had restored about 80% of its pre-pandemic capacity as of March, and plans to reach 90% by March 2024, says executive vice-president of commercial Lee Lik Hsin. On prospects for the China market, Lee notes that despite the excitement around that country's reopening "it will take some time for [all] stakeholders in the industry to be totally ready". He cites tour operators as a key example, pointing to how "a large part of Chinese travel is leisure travel through tour operators". "Truth be told, that is not yet up to 100% pre-Covid levels yet. But it is starting to come in and we are optimistic about the full resumption," he adds. The group is also continuing to see "very strong demand" on Southeast Asian flights, chief executive Goh Choon Phong says, adding that "we haven't quite seen any weakening in the near term at least".

BOC Aviation chief Robert Martin foresees that lessors will still have to deal with a "probably a handful" of airline restructurings this year, amid a widening gap between the haves and have-nots among airlines emerging from the pandemic. "I believe there'll be a number of restructurings still this year," Martin says, speaking on a panel session on 10 May at the ISTAT Asia conference in Bangkok. He outlined the profile of such airlines as highly leveraged, largely relying on working capital from the lessors and rather than banks, volatile local currency against the US dollar, and "probably" high domestic interest rates that make it unfavourable refinance in the domestic market. Martin highlights Brazil, and potentially Vietnam, as countries of interest at the moment. "Ideally, all those bankers around there should be helping these people raise equity, but we're not seeing that sign of it yet," he adds. Martin notes that there is a widening gap between well-capitalised airlines and those that are not. "We're seeing a bifurcation of credit markets, so the strong customers are definitely getting stronger – the US domestics, the guys in the Middle East, the big carriers here in Asia, the big carriers in Europe. And so we're not concerned at all about those things, they're all fine. "There is then a group of people who have come through Covid that survived. They've had big deferrals, generally they're in countries where foreign exchange rates against the US dollar are volatile, and they have not finished their refinancing yet… and they haven't raised equity. So this problem, this shoe is still going to fall," he explains. Similar dynamics are at play among lessors, Martin noted, when asked if some lessors could see improvement in their credit ratings. "Some of the stronger leasing companies have got stronger and some of the weaker leasing companies unfortunately will have become weaker, and size definitely plays a role in that. "If you're a large leasing company, you can take some hits during a downturn. You can take the write-offs related to Russia. And so because of that those who made those decisions and took the hard decisions, I think yes, we'll see some of them getting upgraded," he says.