To keep SIA afloat, sell flight credits valid for up to 3 years
As Singapore Airlines confronts the Covid-19 crisis, the writer suggests that the national carrier sell flight credits that customers may use once the pandemic ends.
With Singapore Airlines (SIA) reducing capacity by 96 per cent, its revenue and cash flow are expected to take a hit, even though the airline has embarked on cost-cutting measures.
While SIA can seek further financial support through loans, additional share or bond issues and government support to tide over cash flow challenges, what it needs most are still customers.Â
I read that many Americans are supporting their local businesses during the Covid-19 crisis by buying cash vouchers that they can use later.
Perhaps SIA could consider a similar idea where customers buy flight credits — valid for one, two or even three years — and use them for personal or family travel once the pandemic is under control and flight capacity is restored.
SIA may encourage large credit purchases by giving free credits (for example, buy 1,000 credits and get 100).
If the industry expects customers to travel with a vengeance after the pandemic, buyers of such flight credits could be given priority over future cash-paying ones when seats become hot items again.Â
Such a scheme may be a better source of cash injection for SIA, since it also secures future revenue for the company.
Other hard-hit Singapore businesses in the retail trade may also benefit from such a scheme.Â
This way, Singaporeans and other loyal SIA customers can do their part to help our national carrier tide over this difficult period. Â
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