For the first time in its 48-year history, Singapore Airlines (SIA) has reported a full-year net loss as the COVID-19 pandemic continues to devastate the commercial aviation industry worldwide. The airline reported in a filing to the Singapore Exchange (SGX) a net loss of S$212 million (US$148.96 million) for the 12 months ending 31 March compared to a net profit of S$683 million profit for the previous year. The airline’s net loss for the period from January to March was S$732 million compared with the S$203 million net profit in the same period a year ago. The airline had warned it faced a net loss in a filing to the SGX on 8 May.
The company said it was continuing to conserve cash as much as possible and cut costs by using management pay cuts, voluntary and compulsory no-pay leave schemes, and a shorter work month for all ground staff. “We have worked with suppliers and partners to reduce cost and reschedule payments and have deferred non-essential projects and imposed tight controls on discretionary spending,” the airline said in its SGX filing.
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The company also said the “drastic cuts” in passenger flight operations have significantly reduced overall cargo capacity, but there still remains “strong demand from global supply chains for air freight, especially for the movement of critical medical supplies and essential goods. Beyond maximising freighter utilisation during this time, we have also deployed passenger aircraft on cargo-only missions and secured regulatory approval to transport freight in passenger seats and overhead bins”, the airline said.
SIA is also in discussions with OEMs like Boeing and Airbus to defer aircraft deliveries and payments to “reduce near term cash outflows”.
“We do not take the support and understanding of our customers for granted, and have taken steps to keep in touch and communicate with them regularly. We have also revised our global waiver policy to offer bonus flight credits or provide refunds to those who prefer that option and extended the validity of our KrisFlyer and PPS statuses,” SIA said.
The Singapore government has said it will take any measures it needs to take to ensure the survival of the airline and has set aside S$750 million of support for the aviation sector. SIA in March said it had secured up to S$19 billion of funding to help see it through the COVID-19 pandemic and to expand afterward. It is tapping existing investors for up to S$15 billion through the sale of shares and convertible bonds to offset the shock to its business. The fundraising is being underwritten by the airline’s biggest investor, Temasek Holdings, which owns about 55 percent of the group. In addition, it has arranged a S$4 billion bridge loan facility with DBS Bank to support the company’s near-term liquidity requirements.
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