On Thursday, Singapore Airlines reported the first-ever annual net loss in the carrier’s 48-year long history. The SIA Group, comprised of Singapore Airlines, SilkAir, and low-cost Scoot, was concluding a strong third-quarter when COVID-19 sent the carriers reeling into what is truly an unprecedented spin.
Net loss of $149.1 million
In case it had passed anyone by until now, COVID-19 has not been kind to the aviation industry. Not even one of the world’s most successful commercial carriers is escaping without significant damage. In a filing to the Singapore Exchange on Thursday, Singapore Airlines reported a net loss of $149.1 million (S$212 million) for the 12 months ending on the 31st of March.
These numbers are in contrast to last year when the Group reported a profit of $479 million (S$683 million) for the preceding 12-month period. Losses for the final quarter alone, January to March, amounted to $513 million (S$732 million), as opposed to last year’s net profit of $142,4 million (S$203 million) over the same three months.
It cited poor fuel-hedging bets along with, not surprisingly, a precipitous decline in demand caused by the coronavirus outbreak as the cause of the dismal numbers. Moreover, it said the timing of any recovery was uncertain.
Maintaining minimum flight connectivity
The airline said in the statement that there were few signs of abatement in the COVID-19 pandemic. It expressed that it would maintain a minimum flight connectivity within its network while ensuring the capability to scale up operations should there be “an uptick in demand.”
“We have set up an internal task force to review all aspects of our operations to ensure that we are ready to ramp up services when air travel recovers. This includes any modifications to our inflight products and end-to-end service delivery to provide additional health and safety assurances to our customers and crew.”
The Group also stated that it would seek to retain its “talented and highly trained” staff throughout the crisis and that their expertise and dedication would be crucial when the recovery comes.
Comeback slower with no domestic market
The Star Alliance member began its up until now unbroken profitable streak in 1972. On the 1st of October that year, SIA began operations with three flights – one to London, one to Sydney, and one on its way back to Singapore.
But now, the transit traffic that has made Singapore Airlines so profitable may turn out to leave the carrier not well-situated for a comeback. IATA predicts that domestic markets will recover more quickly than international travel. Singapore, of course, is a small city-state and, as such, lacks domestic routes.
Singapore Airlines and its regional sister-carrier SilkAir have cut capacity through the end of June by 96%. The Group’s low-cost branch Scoot by 98%. The Group said it is currently exploring other funding sources, such as secured financing, as well as conducting talks to defer aircraft deliveries and payments.
The airline had already warned of the poor results last week, and its management team is due to hold a results briefing for analysts and media on Friday.
Simple Flying has reached out to Singapore Airlines for a comment but was yet to receive a reply at the time of publication.