Singapore Airlines (SIA) has reported a loss of $1.12 billion in 1Q20/21 ended June 30 from its earnings of $111 million the year before. This was primarily driven by the weaker operating performance, as well as the $127 million loss from the liquidation of NokScoot on June 26.
See: SIA to liquidate associated company of Scoot TigerAir, records one-off charge of $123.6 mil
This marks the second consecutive quarter of losses registered by the airline, following its $732.4 million loss in 4Q19/20.
See also: SIA plunges into 4Q loss of $732.4 mil as air travel collapses
The losses registered for the quarter translates into losses per share of 57.2 cents.
SIA says it entered into the first quarter at a time when market conditions were “deteriorating rapidly” due to the spread of the Covid-19 pandemic. The pandemic, in turn, led to the halt in air travel following international border closures.
Consequently, passenger carriage for Singapore Airlines, SilkAir, and Scoot, fell 99.4%, 99.8%, and 99.9% y-o-y, which resulted in an overall decline of 99.5% y-o-y for the group.
1Q2021 group revenue plunged 79.3% to $851 million from the $4.10 billion registered in the same period last year due to the steep drop in passenger flown revenue.
This was partially mitigated by improvements in cargo flown revenue, which is due to the airfreight capacity crunch, and strong demand for urgent needs of personal protective equipment, pharmaceuticals, and fresh food. SIA says it has also deployed passenger aircraft on cargo missions to boost cargo capacity.
Group expenditure fell 51.6% y-o-y to $1.8 billion, which is attributable to lower net fuel cost and non-fuel expenditure.
Net fuel cost fell 86.8% (or $1.02 billion) y-o-y on capacity cuts and lower fuel prices, although it was slightly offset by fuel hedging losses on contracts which matured during the quarter, compared to a gain in the previous year.
Mark-to-market losses of $464 million on ineffective fuel hedges were also recognised for the quarter.
Non-fuel expenditure fell 53.5% y-o-y (or $1.46 billion) following cost-saving measures from capacity cuts and support schemes from the Singapore government.
Since the start of the current FY, SIA has increased its liquidity by some $11 billion due to the completed rights issue in June ($8.8 billion), secured financing on its A350-900 and 787-10 aircraft ($1.7 billion), and new committed lines of credit and short-term unsecured loan ($500 million).
Looking ahead, the group says it has increased its network to 32 destinations at end June, from the pared-down 18 destinations in April, following the gradual reopening of international borders. Selected routes will see an increase in frequencies depending on demand in the coming months.
SIA expects its passenger capacity to stand at less than half of its pre-Covid-19 levels by the end of this FY.
The group adds that recovery in international air travel is slower than expected, and that passenger traffic numbers may take around two to four years to return to levels before the Covid-19 pandemic.
As at June 30, the group has registered total debt of $12.04 billion, total assets of $40.35 billion, and total cash and bank balances of $9.57 billion.
Shares in SIA closed 4 cents lower or 1.1% down, at $3.53 on Wednesday (July 29) prior to the announcement.
