SIA Group Suffers $1 Billion Net Loss In the First Quarter
The Singapore Airlines Group has reported on its 1st quarter which has more than $1 billion net loss. The details were published in the new on July 29. Here are some of the details:
• Passenger carriage measured in revenue-passenger-kilometers fell by
– 99.4 percent year-on-year for Singapore Airlines,
– 99.8 percent for SilkAir, and
– 99.9 percent for Scoot.
• This resulted in a 99.5 percent decline for the group.
• Group revenue declined S$3.251 billion (-79.3 percent) year-on-year to S$851 million during the first quarter.
• The sharp drop in passenger flown revenue was partially offset by improvements in cargo was flown revenue.
• SIA has proactively deployed passenger aircraft on cargo missions to boost cargo capacity.
• This was due to airfreight capacity crunch coupled with strong demand for urgent movements of personal protective equipment, pharmaceuticals, and fresh foods.
• Group expenditure decreased S$2.014 billion (down 51.6 percent) from 2019 to S$1.888 billion, attributable to lower net fuel cost and non-fuel expenditure.
• Net fuel cost fell S$1.018 billion (-86.8 percent) as capacity cuts and lower fuel prices led to a reduction in fuel cost before hedging of S$1.146 billion (-93.2 percent).
• This was partially offset by fuel hedging losses on contracts that matured during the quarter, as compared to a gain in 2019.
• The group further recognized additional ineffective hedges with losses of S$464 million that have been recognized this quarter.
• Non-fuel expenditure was down S$1.46 billion (-53.5 percent) year-on-year, following widespread cost-saving measures from capacity cuts as well as support schemes given by the government to reduce staff and other operating costs.
• Consequently, the group swung into an operating loss of S$1.037 billion for the quarter, a S$1.234 billion reversal from an operating profit of S$200 million last year
• For the quarter ended June 30, 2020, the group reported a net loss of S$1.123 billion, a deterioration of S$1.234 billion against last year.
• The group’s passenger capacity by the end of Q2 FY20/21 is projected to be approximately 7 percent compared to pre-COVID-19 levels.
• Currently, of a group fleet of 220 aircraft including seven freighters, 32 aircraft are deployed on passenger services.
• All seven freighters are operational, while 33 passenger aircraft have also been deployed on cargo-only services.
• SIA has parked 119 aircraft at Singapore Changi Airport, and 29 aircraft are stored in Alcie Springs.
• The group will continue to monitor the situation and, when appropriate, return the aircraft to Singapore ahead of re-introducing them to its operations.
• It is estimated to take between two to four years for passenger traffic numbers to return to pre-pandemic levels.
• By the end of FY20/21, the group’s passenger capacity may reach less than half of its pre-COVID-19 levels.
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