Singapore Airlines Launches Share Buyback and Bond Issue Amid Fleet Modernization
Singapore Airlines has embarked on a strategic financial initiative, introducing a share buyback program and a USD500 million bond issue, as it progresses with its fleet modernization efforts, including the phase-out of its Boeing 737-800 aircraft. These moves align with the airline’s broader strategy to strengthen its financial footing and support ongoing operations and growth.
The share buyback program, announced in July 2023, targets up to 5% of the carrier’s issued capital, with plans to repurchase up to 148,711,715 shares. This initiative aims to enhance shareholder value, with the buyback price set at up to 105% of the average trading price on the Singapore Stock Exchange prior to purchase. As of March 11, 2024, Singapore Airlines has already repurchased 1,597,100 shares, with the program set to continue until the specified target is reached, authorization is revoked, or at the next annual general meeting.
Simultaneously, Singapore Airlines has confirmed the issuance of USD500 million in bonds at a fixed rate of 5.25% per annum, under its SGD10 billion multicurrency medium-term note program. These bonds, expected to be issued on March 21, 2024, are part of the airline’s strategy to cover aircraft acquisition costs, working capital needs, and refinancing expenses, further bolstering its financial structure for future investments and operations.
The group’s commitment to fleet renewal and expansion is evident in its impressive order book, which includes a diverse range of aircraft aimed at enhancing operational efficiency and passenger experience. Among these orders are the 737-8s, which will play a crucial role in replacing the older 737-800s starting September 2024. This transition is part of Singapore Airlines’ efforts to modernize its short-haul fleet and improve its environmental footprint, with the 737-8 offering better fuel efficiency and lower emissions.
Singapore Airlines’ operational performance remains strong, with the group reporting its best-ever quarterly revenue for the period ending December 31, 2023. The airline, along with its low-cost subsidiary Scoot, carried a combined 3.1 million passengers in February 2024 alone, underscoring the robust recovery and growth trajectory of the group post-pandemic.
As Singapore Airlines progresses with its strategic initiatives, including the share buyback, bond issuance, and fleet modernization, the airline reinforces its position as a leading carrier committed to financial stability, operational excellence, and sustainable growth in the competitive aviation landscape.