Flag carrier Singapore Airlines (SIA) said last week it posted a net loss of S$142 million for the third quarter ended 31 December 2020 compared to a net profit of S$315 million the year before because of the COVID-19 pandemic and its dire effects on the aviation industry. The airline group said it also posted an operating loss of S$331 million for the quarter compared to an operating profit of S$780 million in the same period a year ago.
SIA said in its announcement that international air travel demand remained “severely constrained in the quarter, as border controls and travel restrictions continued to be in place in many countries amid new waves of the COVID-19 infection. As a result, the SIA group’s passenger carriage shrank 97.6 percent year-on-year. However, when compared to the previous quarter, passenger carriage grew 44.8 percent on the back of a 90.8 percent increase in capacity for the third quarter”.
The company also said group revenue fell S$3.4 billion or 76.1 percent year-on-year to S$1.06 billion million during the third quarter, as all three passenger airlines within the group recorded a sharp drop in passenger flown revenue due to low traffic. This was partially offset by improvements in cargo flown revenue, as the global airfreight capacity crunch continued to provide strong support for both load factors and yields. In response to the continued strong demand for pharmaceutical and e-commerce shipments, and an uptick in general cargo demand, SIA added capacity by stepping up the frequency of passenger aircraft operating cargo-only flights and through the resumption of more passenger services. The utilisation of the freighter fleet was also maximised to deliver more cargo capacity.
SIA said the resurgence of COVID-19 infections as well as the spread of more transmissible strains of the virus continue to weigh on international air travel, as border controls and travel restrictions tighten in many countries. “Nonetheless, in line with Singapore’s progressive re-opening, the group expects to see a measured expansion of the passenger network over the coming months. We will continue to monitor the status of travel restrictions and adjust our capacity accordingly to meet the traffic demand”.
The company also said airfreight capacity remains constrained due to the steep reduction in passenger flights, which has affected bellyhold cargo capacity worldwide. While cargo demand has tapered off after the traditional year-end peak period, “strong fundamentals and healthy Purchasing Managers’ Index readings across many key export economies will continue to support cargo demand in the coming months”, SIA said.