Singapore Airlines in financial re-structuring

Following their massive order for 214 airliners including 67 Airbus A350s, the first of which was delivered in January 2016 and another ten delivered in the first year of operation, Southeast Asia’s biggest carrier, Singapore Airlines is expected to turn to a net-debt position as early as 2018 for the first time in 13 years as the company borrows money and sells bonds to meet capital expenditure needs.

SIA, which has traditionally limited its debt load, would benefit from raising funds more cheaply through borrowings to improve return ratios and valuations, according to equity research firms. The airline, which has US$53 billion (S$73.95 billion) of airliners on order had expanded a medium-term note programme by two thirds to US$5 billion in April 2017 and said it intends to “proactively” take on more debt in future. It is pertinent to point that SIA has the smallest debt-to-equity ratio among 11 major airlines on the MSCI Asia Pacific Index at 10.3 per cent, compared with 126 per cent for Cathay Pacific.