Goh Phoong, the CEO of Singapore Airlines, informed analysts and reporters that despite Boeing 737 Max are tragic record in fatal crashes in Indonesia and Ethiopia recently, its order for around 31 Boeing Jets of the 737 Max model was still underway.
This announcement followed news that 6 Boeing 737 jets were grounded by SilkAir, a Singapore Airlines affiliate. Sri Jegarajah of CNBC was told by Goh that this grounding arrangement, however, complicates the merger between SilkAir and Singapore Airlines.
Since the Boeing 737 jets have now been grounded, the 737NG planes will be retained by SilkAir. These planes were originally intended to be handed over to Scoot, which was a budget-friendly carrier operated as a branch of Singapore Airlines. The 737 jets were planned as part of a restructuring process.
This also means the airline is now faced with the decision over cabin upgrades, since the current ones on the 737NG jets are old and outdated. Scoot is likely to be affected negatively as well, with it being forced to advance in its growth, without new aircrafts on its fleet.
Goh stated to CNBC that the company was looking at viable solutions in all cases. He believed that they would arrive at the proper ones eventually.
An Ethiopian Airlines-operated 737 Max crashed in March, just a few minutes after the plane lifted off, causing the deaths of 157 people who were on board. This was within 5 months of a similar accident that occurred to an Indonesian airline Lion Air-operated 737 Max, in which 189 people were killed, up on flying from Jakarta.
A sign of high passenger demand, Singapore Airlines declared its highest annual revenue since inception on Thursday. However, increased fuel costs during the year have bitten off a huge portion of the company’s profits that have now halved to around $682.7 M.