Singapore - Singapore Airlines (SIA) Monday said it planned to reduce capacities by 11 per cent in the coming financial year, which starts in April, owing to a drop in demand.

Citing falling demand, as reflected in advance bookings, SIA said it would decommissione 17 aircraft.

"Before recession hit major markets, the plan was for only four aircraft to be phased out - one for conversion to a freighter, and three to be returned to lessors at completion of lease contracts," it said in a statement.

"The drop in air transportation has been sharp and swift. Given the falls of over 20 per cent that we have seen recently in air cargo shipments, and the tradition of demand for air travel following closely behind trends on the cargo side of the business, we have to face the reality that 2009 is going to be a very difficult year," said SIA chief executive officer Chew Choon Seng.

SIA said it was also in discussions with unions on measures that would affect staff including voluntary leave without pay, voluntary early retirement and shorter work months. If there were to be cuts in salary, the management would be the first to take them, SIA stressed. (dpa)