Singapore Airlines Group Announces Financial Results

Daniel Fowler
August 1, 2020

The net loss in the three months through June was S$1.12 billion ($815 million), compared with net income of S$111 million a year earlier.

For the quarter, group expenditure fell 51.6 per cent to S$1.89 billion due to lower net fuel cost and non-fuel expenditure, but this was partially offset by fuel-hedging losses on contracts which matured in the quarter. Low-priced unit Scoot operated a minimal network to cities including Hong Kong and Perth.

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 Singapore.

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. It said some transit restrictions have also been lifted and the airline is now able to carry one-way transfer traffic originating from Australia, New Zealand, China, Hong Kong, Taiwan, South Korea, Japan and Europe to any point within the SIA Group network.

The SIA Group is now operating 32 aircraft on passenger services out of a fleet of 220 aircraft, including seven freighters which are operational. SIA also deployed passenger aircraft on cargo missions to boost cargo capacity. A total of 119 aircraft have been parked at Singapore Changi Airport, and 29 planes have been stored in Alice Springs, says the group.

The group also reiterated the outlook provided in an earlier circular, stating that "the recovery trajectory in worldwide air travel is slower than initially expected", and will take between two to four years for passenger traffic numbers to return to pre-pandemic levels. It said it has reached agreement with Airbus on some orders and discussions with Boeing are ongoing.

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"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.

Singapore Airlines said Wednesday its passenger capacity still may be less than half of pre-coronavirus levels by the end of its fiscal year next March.

In all, SIA has raised about $11 billion in liquidity since the start of its financial year in April. "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. There was a 19% increase in cargo load factor, in large due to the lack of passenger flights that transport some cargo.

Passenger capacity at the end of the second quarter is forecast to be about 7% of the level before Covid-19.

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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