Monday, 03 August, 2020

Virus-hit Singapore Airlines suffers $800 million Q1 loss

SIA sinks into red with record quarterly loss of $1.12b Passenger carriage fell across SIA Silk Air and Scoot resulting in a 99.5 per cent decline for the company
Ginger Lawrence | 01 August, 2020, 11:26

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. Revenue plunged 79.3% to S$851 million during the quarter, the airline said on Wednesday.

The company said Wednesday its group-wide spending fell S$2.01 billion (-51.6 percent) from past year to $1.88 billion, which it attributed to lower net fuel costs and non-fuel expenditure. SilkAir and Scoot also operated minimal networks but added services later on.

The shares fell as much as 5.1 per cent to S$3.35, the lowest intraday price since September 1998, before paring to S$3.40 as of 1:44 p.m.in Singapore.

Singapore Airlines (SIA) Group has sunk into a net loss of $1.12b in Q1 FY2021 from a net profit of $111m in Q1 FY2020, an announcement revealed.

Like many carriers around the world, Singapore Airlines has been hit hard by the pandemic and resulting travel restrictions.

Further, passenger carriage in Q1 plunged 99.4% YoY for SIA, 99.8% for SilkAir and 99.9% in Scoot. All seven freighters are operational while 33 passenger aircraft have also been deployed on cargo-only services.

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

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Singapore Airlines said its passenger capacity may still be less than half pre-coronavirus levels by the end of its fiscal year next March, and that the recovery in worldwide travel is slower than initially expected.

Some of these include reviewing its fleet size based on its needs, as well as negotiating with aircraft manufacturers to adjust delivery orders and payment schedules to reduce near-term cash outflows. The group has parked 119 aircraft at Singapore Changi Airport and 29 aircraft are stored in Alice Springs, Australia.

"We have reached agreement with Airbus on some of these matters and discussions with Boeing are ongoing", it said.

The International Air Transport Association (IATA) estimates that airlines operating in the Asia-Pacific region stand to lose a combined $27.8 billion this year. "Industry forecasts now expect that it will take between two to four years for passenger traffic numbers to return to pre-pandemic levels", Singapore Airlines said.

Since the start of the financial year, the airline has increased liquidity by S$11 billion through a rights issue of new stock and secured financing facilities.

As such, SIA group projects that passenger capacity by the end of the next reporting quarter (Q2 FY2020/2021) will be approximately 7% of pre-pandemic numbers.

Meanwhile, Bloomberg Intelligence aviation analysts James Teo and Chris Muckensturm estimated in a 15 July note that SIA's Q1 net loss as well as "drag" from S$124 million in one-off costs due to the liquidation of its NokScoot joint venture in Thailand.