With airlines around the world suffering financially due to the COVID-19 pandemic, outside sources are stepping in to help them recover. Singapore Airlines (SIA) has just received a $13 billion funding package from state investor Temasek Holdings.
Nearly one-third of the world's aircraft are currently grounded as a result of the highly contagious virus, and thousands of airline workers are forced to take unpaid leave to keep the companies afloat. Governments around the world are providing help to struggling airlines; the United States has offered $58 billion in aid. Qantas Airways received a $636.1 million funding package earlier this week.
Thus far, the SIA's $13 billion package has been the biggest rescue package made to any airline.
According to Reuters, SIA has been greatly struggling throughout the pandemic. The airline plunged to its lowest in 22 years, causing the group to place all of its shares into a trading halt on Thursday. SIA confirmed that it would cut capacity by 96 percent, ground almost its entire fleet and impose cost cuts affecting about 10,000 staff.
"Under the current dire circumstances, the rights issue is the best tactical move for SIA. It underscores the carrier's strategic importance to Singapore and the island state's position as both a financial center and aviation hub," Shukor Yusof, head of aviation consultancy Endau Analytics, said in a blog post.
SIA and Temasek International personnel are confident that the airline will not only be able to ride out the pandemic but continue to grow and thrive once the pandemic is over. Sia will be using the funding from the rights issues to strengthen its capital and operational expenditure needs.
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