SIA Group reports S$1.12 billion net loss in first financial quarter, overall passenger carriage fell by 99.5%

SINGAPORE — The Singapore Airlines (SIA) Group reported a net loss of S$1.12 billion in its first financial quarter ending June 30, as travel restrictions due to Covid-19 delivered a blow to the aviation industry.

In its regulatory filing published on Wednesday (July 29), the national carrier also said that revenue for the group dived 79.3 per cent, dropping S$3.25 billion to S$851 million year-on-year, while expenditure fell by 51.6 per cent to S$1.89 billion over the same period.

SIA’s financial year began in April this year and will end in March next year.

In May, it reported a full-year net loss for its previous financial year, the first in its 48-year history.

In its first quarter report, it said that passenger carriage fell by 99.4 per cent year-on-year for SIA, 99.8 per cent for SilkAir and 99.9 per cent for Scoot, resulting in an overall 99.5 per cent decline for the group.

“The group entered the first quarter at a time when market conditions were deteriorating rapidly due to the spread of Covid-19 globally. Demand for air travel evaporated as travel restrictions and border controls were imposed around the world to contain the spread of the virus,” it said.

Apart from the weaker operating performance, there was also the financial impact of S$127 million from the liquidation of NokScoot, its joint venture with Thailand’s Nok Air, it added.

Looking ahead, SIA said that the recovery trajectory in international air travel is slower than initially expected and that industry experts such as the International Air Transport Association and the International Civil Aviation Organisation have “continued to revise downwards their projections for the recovery of global passenger traffic in the near term”.

“Industry forecast currently expects that it will take between two to four years for passenger traffic numbers to return to pre-pandemic levels,” it added.

By the end of the second quarter of its financial year, the company is projecting passenger capacity to be about 7 per cent compared with pre-Covid-19 levels.

And at the end of the present financial year, it expects its passenger capacity to reach less than half of its pre-Covid-19 levels.

“We are reviewing the potential 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 better clarity on the fleet mix the group will need,” it said.

In all, 32 of its aircraft — out of a fleet of 220 including seven freighters — are deployed on passenger services.

All seven freighters are operational while 33 passenger aircraft have been deployed on cargo-only services.

“We have parked 119 aircraft at Singapore Changi Airport and 29 aircraft are stored in Alice Springs (in Australia). We will continue to monitor the situation and, when appropriate, will return the aircraft to Singapore ahead of reintroducing them to our operations.”

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