Singapore Airlines Group is looking to match its fleet size to new market norms where reduced demand for international traffic is expected to persist, the airline said in its quarterly earnings release.

The Singapore Airlines (SQ, Singapore Changi) parent said a review of its future network and its related fleet needs was scheduled to be completed by the end of September 2020. While the group would not provide any further information on its plans at this time, it underlined that "the review [was] likely to lead to a material impairment of the carrying values of older generation aircraft, particularly the A380-800 aircraft which would account for approximately SGD1 billion Singaporean dollars (USD730 million)".

Impairment charges are taken on the aircraft's retirement from the fleet.

According to the ch-aviation fleets advanced module, Singapore Airlines (SQ, Singapore Changi) currently operates nineteen A380-800s, which are 8.3 years old on average. However, due to their deliveries having been spanned over a relatively long period, the oldest quadjet in the carrier's fleet is 12.5 years old while the youngest is just 2.5 years old. The entire subfleet has been parked since the eruption of the pandemic in late March 2020, with seven stored at Alice Springs and the remainder at Singapore Changi.

The airline also operates eight A330-300s, forty-one A350-900s, seven A350-900(ULR)s, seven B747-400(FSCD)s, four B777-300s, twenty-seven B777-300(ER)s, and fifteen B787-10s.

The group said it is also evaluating its future orders.

"As aircraft payments make up a significant portion of our capital expenditure, and in view of the slowdown in travel demand as a result of the pandemic, we have and will continue to engage the aircraft manufacturers to negotiate adjustments to our delivery stream for existing aircraft orders and progress payments to reduce near term cash outflows," the holding said.

The airline has a further nineteen A350-900s and twenty-nine B787-10s on firm order from Airbus and Boeing, as well as twenty B777-9s.

Singapore Airlines confirmed that its plan to integrate its full-service regional subsidiary, SilkAir (MI, Singapore Changi), into the mainline was still planned. Singapore Airlines' absorption of SilkAir's B737-800s remains on track for the first quarter of 2021.

SilkAir currently operates seventeen B737-800s, as well as two A319-100s and seven A320-200s. It also has six grounded B737-8s alongside a further 31 of the type on firm order.

Following the integration of SilkAir into Singapore Airlines, the group's will operate just two brands in Singapore - its full-service mainline and the low-cost Scoot (TR, Singapore Changi). The latter currently operates twenty-six A320-200s, three A320-200Ns, ten B787-8s, and ten B787-9s.

The Singaporean group said that it was also looking at other cost-cutting measures, besides its network and fleet review. Due to a 99.5% drop in traffic, the carrier posted a SGD1.1 billion net loss (USD820 million). The Straits Times has reported that the airline was planning to cut the salaries of all employees by 10% - to date, non-managerial stuff who retained their positions have not faced wage reductions. Previously announced manager and executive pay cuts will be increased by 2-5 percentage points as of August 1.