The first annual loss in its 48 year history was reported by Singapore Airlines on Thursday. the airline blamed the crippling of demand for air travel because of the novel coronavirus pandemic,. The national carrier of Singapore also said that internal task force to review its operations has been set up by it which will also help the airline to prepare for the reopening of air travel –when it happens.
a net loss of S$212 million for the 12 months ending Mar 31 was reported by the SIA Group, owner of the airline, in a filing to the Singapore Exchange. In comparison, the company had made a profit of S$683 million profit in the previous year.
In the last quarter of the current fiscal year, the airline reported a loss of S$732 million compared to a profit of S$203 million in the same quarter a year ago. The company also reported a 94.5 per cent plunge in its operating profits which came in at S$59 million for the year compared to S$1 billion reported by it in the previous year.
The company said that the first nine months of the last fiscal year had been strong driven by robust passenger traffic and extensive initiatives implemented as a part of the airline’s transformation programme.
At the beginning of the last quarter, global travel was brought to a virtual standstill as the coronavirus pandemic hit and spread and travel restrictions were imposed. People were also fearful of travelling in such an environment even to places where travel was allowed, the company noted.
As a consequence, there was a 22 per cent year on year decline in revenue for the airline in the fourth quarter of the last fiscal year with a S$894 million plunge in revenue. This dragged down group revenue for the year to S$16.98 billion which was 2.1 per cent lower year on year. The board of the company did not propose a final dividend.
“The prospects for a recovery in international air travel in the months ahead depend upon when border controls and travel restrictions ease,” said SIA.
“There is no visibility on the timing or trajectory of the recovery at this point, however, as there are few signs of an abatement in the COVID-19 pandemic,” it added.
According to a recent warning by the International Air Transport Association (IATA), the coronavirus pandemic outbreak globally could result in a loss of $113 billion (S$162.7 billion) for passenger airlines in revenues for the current year.
96 per cent of its capacity to the end of June has been cut by SIA and regional arm SilkAir while the company’s budget arm airline Scoot has cut 98 per cent of its capacity for the same period. Negotiations are also ongoing with aircraft manufacturers to make adjustments for the delivery of aircrafts for the existing orders. The company is also holding talks with various suppliers for reschedule payments.
(Adapted from ChannelNewsAsia.com)