Virus-hit Singapore Airlines suffers US$800 mln Q1 loss

  • Virus-hit Singapore Airlines suffers US$800 mln Q1 loss

Virus-hit Singapore Airlines suffers US$800 mln Q1 loss

Singapore Airlines (SIA) reported on Wednesday (July 29) a $1.12 billion net loss in the quarter ended June 30, its largest quarterly loss on record, as demand plummeted amid travel restrictions caused by the Covid-19 pandemic.

Earnings from cargo flights were not enough to offset the massive decline in passenger numbers, and group revenue plunged 79.3 percent year-on-year, it said.

Passenger carriage fell by 99.4 per cent for Singapore Airlines, 99.8 per cent for SilkAir, and 99.9 per cent for Scoot year on year, as air travel "evaporated" globally, it said. However, this was countered by a strong demand for urgent movements of personal protective equipment, pharmaceuticals and fresh foods, resulting in an improvement in cargo load factor. SIA also deployed passenger aircraft on cargo missions to boost cargo capacity.

The SIA Group is now operating 32 aircraft on passenger services out of a fleet of 220 aircraft, including seven freighters which are operational.

Singapore Airlines (SIA) Group (SIAG) can be officially chalked off with the rest of the airlines worldwide after taking heavy losses in Q1 2020 of $1.1 billion.

The carrier's fuel hedging policy led to a S$535-million loss in the quarter, while there was also a S$127 million hit from the liquidation of NokScoot Airlines Co.

In all, SIA has raised about $11 billion in liquidity since the start of its financial year in April. The group's low-priced carrier Scoot operated to just two destinations during the peak of the pandemic. "We will continue to optimise the usage of our freighters to capture demand opportunities and supplement our cargo capacity through the deployment of cargo-only passenger flights when justified", SIA said.

The airline said it has reached an agreement with Airbus on adjusting aircraft deliveries and payments, though it didn't provide details.

Reversely, Li said that downside catalysts include a faster-than-expected recovery in travel demand/consumer confidence post-Covid-19 and a rapid recovery in oil prices in the near term.

"Our current view for planning purposes is that by the end of FY20/21, the Group's passenger capacity may reach less than half of its pre-Covid-19 levels". The airlines said Wednesday that the recovery trajectory in global air travel is slower than initially expected, and that the group's passenger capacity may reach less than half of its pre-Covid-19 levels by the end of this fiscal year. SIAG expects the review to result in a further reduction of $1 billion in potential carrying value.

The integration of SilkAir into the group is on track, it noted. This move is expected to yield economies of scale for SIA.

The net loss in the three months to June was S$1.12 billion (RM3.45 billion), compared to net income of S$111 million a year earlier, the carrier said in a statement yesterday.