SIA Group records second consecutive annual loss after 'toughest year in its history'

SIA Group records second consecutive annual loss after 'toughest year in its history'

A Singapore Airlines plane
A Singapore Airlines plane is seen on the tarmac at Changi Airport in Singapore on Mar 15, 2021. (Photo: AFP/Roslan Rahman)

SINGAPORE: Singapore Airlines (SIA) Group on Wednesday (May 19) posted its second consecutive annual loss after what it called the "toughest year in its history", as passenger traffic plunged during the COVID-19 outbreak.

Net loss widened to a record S$4.3 billion for the year ended March, after being hit hard by global travel restrictions brought about by the pandemic.

The loss was far bigger than the S$212 million recorded in the prior financial year, its first ever dip in the red, when only one quarter had been affected by the pandemic.

Group revenue fell 76.1 per cent year-on-year to S$3.82 billion due to the “plunge in passenger flown revenue across Singapore Airlines, SilkAir and Scoot”, the company said in a news release.

READ: Singapore Airlines raises S$2 billion from airplane sale-and-leaseback deals

SIA Group said that it would issue convertible bonds to raise gross proceeds of about S$6.2 billion to provide the company with more options to raise further debt financing if necessary.

The move will also strengthen its financial foundation to navigate the COVID-19 pandemic and enable it to “make the necessary investments to secure its industry-leading position”, it added.

The board is not proposing a final dividend “in view of the significant losses incurred and the need to conserve cash”, SIA said.

READ: SIA Group's passenger traffic up 10 times in April

Passenger traffic plunged 97.9 per cent, with the group serving 596,000 passengers across its network during the year. In the previous financial year, the group carried 35.8 million passengers.

A much-anticipated Singapore-Hong Kong air bubble that was due to launch on May 26 has been postponed for a second time, amid a spike in recent unlinked COVID-19 cases in Singapore. It was initially due to launch on Nov 22 last year, but was deferred after a rise in COVID-19 cases in Hong Kong. 

SIA Group said it expects passenger capacity to rise to 28 per cent of pre-pandemic levels in June, and around 32 per cent by July.

Its cargo operations performed better, supported by strong air cargo demand - especially in key segments such as e-commerce, pharmaceuticals and electronics.

"Improvements in freighter utilisation, deployment of passenger aircraft for cargo-only flights, and removing seats from passenger cabins to create additional volume for cargo partially mitigated the loss of passenger aircraft bellyhold capacity during the pandemic," the group said.

READ: A new way to fly? How COVID-19 accelerated changes in the aviation sector

CONTINUED EXPANSION, GROWTH

Looking ahead, SIA said it “expects to continue with a measured expansion of the passenger network and will remain nimble and flexible in adjusting capacity to meet the demand for air travel”.

The group flew to 60 destinations including Singapore at the end of March, compared to 54 destinations three months earlier.

“The growing pace of mass vaccination exercises in key markets provides hope for further recovery in international air travel demand in the second half of 2021,” it said.

The group is “well-positioned” to capture more COVID-19 shipments into the Asia-Pacific region, as production ramps up and exports grow, it added.

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“SIA is also actively pursuing new engines of revenue growth, as well as initiatives to achieve a more competitive cost base to secure its future financial sustainability,” the airline said.

“The Group will continue to exercise discipline on costs and cash management.”

Source: CNA/ga

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