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

Singapore Airlines (SIA) sank deep into the red with a $1.12 billion net loss for the three months ended June 30, its largest quarterly loss on record, as demand plummeted amid travel restrictions caused by the Covid-19 pandemic.

Revenue for the group plunged to $851 million, a 79.3 per cent dip on the $4.1 billion from the same period last year.

Expenditure fell 51.6 per cent to $1.89 billion due to lower net fuel cost and cost-saving measures from capacity cuts, the company said.

SIA had entered the first quarter "at a time when market conditions were deteriorating rapidly due to the spread of Covid-19 globally", the group said.

"Demand for air travel evaporated as travel restrictions and border controls were imposed around the world to contain the spread of the virus."

Passenger carriage fell across SIA, SilkAir and Scoot, resulting in a 99.5 per cent decline for the company.

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The deep plunge in traffic for all three passenger airlines could be partially offset only by improvements in cargo-flown revenue, SIA said.

"The airfreight capacity crunch, coupled with strong demand for urgent movements of personal protective equipment, pharmaceutical and fresh foods, brought about a significant improvement in cargo load factor," SIA said, adding that it has deployed passenger aircraft on cargo missions to boost cargo capacity.

NOT SO SOON

The integration of SilkAir into the group is on track, it noted.

On its outlook, SIA noted that international air travel is not recovering as quickly as expected, with industry experts such as the International Air Transport Association and International Civil Aviation Organisation projecting that it will take between two and four years for passenger traffic numbers to return to pre-pandemic levels.

"We are reviewing the shape and size of our network over the longer term, given Covid-19 and its impact on our passenger traffic and revenue, which will provide clarity on fleet size and mix that (SIA) will need."

The review is expected to be completed by end-September. - THE STRAITS TIMES