Singapore Airlines reports S$1.12b Q1 loss due to pandemic

SIA sinks into red with record quarterly loss of $1.12b

Passenger traffic was reduced to nearly zero in the three months to June, SIA said, leading to the Asian carrier's biggest-ever quarterly net loss of Sg$1.12 billion ($816.58 million). Sales dropped 79% to S$851 million and traffic measured by revenue passenger kilometres sank 99.5%.

The group posted an operating loss of S$1.04 billion for the quarter, a decline of S$1.24 billion from Q1 2020's operating profit of S$200 million, largely due to mark-to-market fuel hedge losses of S$464 million. The group's low-priced carrier Scoot operated to just two destinations during the peak of the pandemic.

Singapore Airlines' shares fell 1.1% to close at S$3.53 before the earnings release.

Singapore Airlines was operating only to 24 cities by the end of June.

Singapore's-national carrier, Singapore Airlines, announced significant losses during the company's second-quarter financial results.

As a result, passenger traffic for Singapore Airlines fell by 99.4 per cent year-on-year, 99.8 per cent for Silkair, and 99.9 per cent for Scoot, resulting in 99.5 per cent drop for the SIA Group.

Currently, of a group fleet of 220 aircraft, 32 are deployed on passenger services, seven freighters are operational, while 33 passengers have also been deployed on cargo-only services. The remainder of the fleet is parked at Singapore Changi Airport and in Alice Springs, Australia.

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 airline has reached an agreement with Airbus and is in negotiations with Boeing. The International Air Transport Association said Tuesday the airline industry is unlikely to recover fully before 2024.

"Industry forecasts now expect that it will take between two and four years for passenger traffic numbers to return to pre-pandemic levels", said SIA.

Since the start of the year, SIA Group has increased its liquidity by approximately S$11 billion from a rights issue, financing on its A350-900 and 787-10 aircraft, as well as new lines of credit and short-term unsecured loan.

The group's passenger capacity by the end of the next quarter is projected to be about 7 per cent compared to pre-Covid-19 levels.

The airline group also said global airfreight capacity is anticipated to remain constrained in the near term due to "significantly lower belly-hold cargo capacity worldwide, which may help to sustain the current cargo load factors". SIA said that it will step up the frequencies of selected routes if demand picks up in the coming months.

The integration of SilkAir into SIA also remains on track, as it transitions its SilkAir narrowbody operations to SIA, starting with the 737-800 aircraft in Q4 FY21.

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