By Jace Moseley
Singapore Airlines Group Announces Financial Results
Singapore’s-national carrier, Singapore Airlines, announced significant losses during the company’s second-quarter financial results. On July 29, the airline announced that the second quarter, which ended on June 30 and was the first of the carrier’s 2020 fiscal year, resulted in a 1.123 billion Singapore dollar ($816 million) loss. These losses come on the back of a 99.6% drop in passengers due to the COVID-19 pandemic.
The net loss for the first quarter is a significant shift from the carrier’s results in the second quarter of 2019, when it recorded a 111 million Singapore dollar profit. While revenue dropped drastically, the airline was able to decrease total expenditures by 52%, largely due to an 87% reduction in net fuel costs.
Overall, the Singapore Airlines Group saw a revenue decline of 3.251 billion Singapore dollars in the first quarter. This number was nearly 80% lower year-on-year and includes revenues from the group’s other carriers: Scoot and SilkAir.
The carrier increased liquidity in the first quarter by nearly 11 billion Singapore dollars. The increase largely is due to the issuance of 8.8 billion Singapore dollars in rights. On top of a liquidity increase, cash and bank balances rose to 9.6 billion Singapore dollars during the quarter.
Although the passenger side of the airline saw a drastic decrease in passengers carried, the airline’s cargo branch, Singapore Airlines Cargo, saw an increase in load factor and in cargo yield. There was a 19% increase in cargo load factor, in large due to the lack of passenger flights that transport some cargo.
The airline group significantly cut its network during the peak of the pandemic, in large part due to border closures. At its lowest point, Singapore Airlines offered flights to only 14 metro areas around the world. At that same time, SilkAir had ceased all operations except flights to Chongqing, China. The group’s low-cost carrier Scoot operated to just two destinations during the peak of the pandemic.
In April, the group’s airlines operated to just 18 destinations, but that number had increased to 32 by the end of June. The reopening of flights to New Zealand, South Korea, Japan, Australia and other nations has continued, and schedules will be changed to reflect changes in demand and government restrictions.
In a press release, the group projected capacity levels to increase to 7% of pre-COVID numbers by the end of the second quarter.
The airline parked a majority of its fleet, leaving just 32 aircraft active in passenger service. The airline also continues to operate its fleet of seven cargo-only aircraft, as well as using 33 converted passenger aircraft on cargo-only services. The remainder of the fleet is parked at Singapore Changi Airport and in Alice Springs, Australia.
The Singapore-based carrier has also been in discussions with Airbus and Boeing regarding delayed deliveries on new aircraft that are on order. The airline has reached an agreement with Airbus and is in negotiations with Boeing. The slowing of delivery schedules will assist the airline in moderating growth while also reducing outgoing cash flow. The airline group currently has close to 150 aircraft on order, ranging including the Boeing 777X, Boeing 737 MAX 8 and the Airbus A350-900.
Being from Seattle, Jace was bitten by the aviation bug at a young age and never outgrew it. Although none of his family is in the industry, he has always wanted to work in aviation in some capacity. He currently in college studying air traffic management.