Singapore Airlines' Q2 loss narrows on cost cuts, air travel pick-up

SINGAPORE — Singapore Airlines (SIA) said on Thursday (Nov 11) market conditions were improving after it reported a narrower second-quarter loss due to cost-cutting efforts, record cargo revenue and an improvement in passenger numbers from a low base.

The net loss of S$427.6 million for the three months to Sept 30 was down from a record S$2.34 billion loss a year earlier, when Covid-19 restrictions hammered air travel and the airline took large impairment charges on older planes.

It posted a net profit of S$94.5 million in the September quarter of 2019.

Revenue doubled in the second quarter to S$1.53 billion due to strong cargo demand and a four-fold rise in passenger numbers from a very low base.

The airline said monthly operating cashflows were near breakeven levels and it expected passenger capacity to reach 43 per cent of pre-pandemic levels by December, serving half of its previous destinations.

In September, passenger capacity reached around 32 per cent of pre-pandemic levels, though on average it filled only 20 per cent of the seats on its planes.

International air travel continued to recover in the first half of the 2021-2022 financial year, said SIA.

This comes as global Covid-19 vaccination rates increased and travel corridors — such as Singapore's vaccinated travel lane (VTL) arrangements — came into effect.

Singapore has recently opened vaccinated travel lanes without quarantine with more than a dozen countries including Britain, the United States, Germany, Australia and South Korea.

Neighbouring Malaysia will be added to the list from Nov 29, allowing for more flights between Singapore and Kuala Lumpur, one of the world's busiest international routes before the pandemic.

The airline will restart Singapore-London flights on its flagship Airbus SE A380 super-jumbos on Nov 18 and will fly them to Sydney from Dec 1.

The carrier said the launch of the first VTL arrangements with Brunei and Germany in early September "resulted in an uptick in demand", especially to the latter.

"Since the start of the pandemic, (SIA Group) has proactively taken steps to review all aspects of our operations to ensure that we are able to quickly ramp up as air travel recovers," SIA said.

"As a result, the Group was the first to announce and open sales for VTL flights, capturing early pent-up travel demand."

SIA, like Hong Kong-based rival Cathay Pacific Airways, has no domestic market and has been hard-hit by border closures.

Singapore has capped daily arrivals for the vaccinated travel lanes, meaning the allowable traffic is in the single-digit percentages of pre-pandemic passenger numbers.

But it is an encouraging sign for travel in the Asia-Pacific region, which had had some of the world's toughest border controls during the pandemic.

SIA's management team will hold a results briefing for analysts and media on Friday. CNA

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