[ad_1]
SINGAPORE: National carrier Singapore Airlines on Thursday (May 14) reported the first annual net loss in its 48-year history, after COVID-19 crippled travel demand.
In a filing to the Singapore Exchange, SIA Group reported a net loss of S $ 212 million for the 12 months ending Mar 31, a reversal from the S $ 683 million profit in the previous year.
Advertisement
Net loss for January to March alone was S $ 732 million, compared with the S $ 203 million net profit in the same period last year.
Operating profit for the year came in at S $ 59 million, down 94.5 per cent from S $ 1 billion the previous year.
SIA said that it had entered the fourth quarter on the back of a strong performance in its first nine months, after robust passenger traffic and extensive initiatives undertaken as part of its transformation program.
Then COVID-19 hit, and fears about the spread of the virus brought global travel to a standstill.
The steep drop in passenger traffic in the fourth quarter resulted in a S $ 894 million plunge in revenue, a decline of 22 per cent from the same period last year.
READ: Commentary: Flying will be leaner, maybe even more responsible, after COVID-19
SIA flagged on May 8 that it would report a material operating loss in the quarter ended Mar 31, partly because of a collapse in fuel prices that led to major hedging losses.
The airline said last week that operating cashflows were expected to remain negative in the quarter ending on Jun 30 at a time when most of its fleet is grounded because of the coronavirus outbreak. Additional fuel hedging losses are expected in that quarter, it said.
The ongoing COVID-19 pandemic has hit the aviation sector hard, as countries tighten borders and enforce lockdowns.
The International Air Transport Association (IATA) has warned that the outbreak could cost passenger airlines up to US $ 113 billion (S $ 162.7 billion) in lost revenue this year.
SIA and regional arm SilkAir have cut 96 per cent of its capacity to the end of June, while its budget arm Scoot has cut 98 per cent.
The group is also in negotiations with aircraft manufacturers to adjust its delivery stream for existing aircraft orders and are talking with various suppliers to reschedule payments.
In March, SIA group’s carriers posted a 60.4 per cent decline in passenger carriage.
READ: Singapore Airlines, Qantas tie up with Australia to carry produce, seafood to Asian markets
With the aviation industry under severe turbulence, SIA announced a slew of cost-cutting measures in March, including wage cuts for its management team and compulsory no-pay leave for employees.
Grounded cabin crew are now helping out in hospitals and as safe distancing ambassadors in trains, markets and malls.
The Government said that it will “spare no effort” to help the national carrier see through this crisis.
SIA has supported Singapore in its fight against COVID-19, including helping to fly in essential supplies and mounting evacuation flights to bring Singaporeans home.
“SIA has always flown Singapore’s flag high all over the world, and made us proud. We will spare no effort to enable it to do so again, ”said Prime Minister Lee Hsien Loong in his May Day message.
READ: COVID-19: Safe distancing on aircraft and higher ticket prices could be ‘new normal’ for industry, say analysts
RETURN OF AIR TRAVEL
Analysts said that the recovery of Singapore’s aviation and tourism sectors in the wake of COVID-19 will be painfully slow, but that the market will fully recover eventually and Singapore could emerge as an even stronger hub over the long term due to strong government support.
The Government has set aside S $ 750 million of support for the aviation sector to help it recover more quickly from the blow dealt to it by COVID-19.
SIA in March said it had secured up to S $ 19 billion of funding to help see it through the coronavirus crisis and to expand afterward, in a sign of confidence that travel demand will eventually return.
It is is tapping existing investors for up to S $ 15 billion through the sale of shares and convertible bonds to offset the shock to its business.
The fundraising is being underwritten by the airline’s biggest investor, Temasek Holdings, which owns about 55 per cent of the group.
In addition, it has arranged a S $ 4 billion bridge loan facility with DBS Bank to support the company’s near-term liquidity requirements.
SIA has also implemented procedures to make sure it protects passengers and its crew members. It is now mandatory for all passengers on SIA and SilkAir flights to bring their own masks on board, and wear it throughout the flight.
Passengers will also have to observe safe distancing measures when embarking and disembarking, as well as when queuing to use the toilets.
This is in accordance with a directive by the Civil Aviation Authority of Singapore, said the airline.
Customers traveling to Singapore will have to undergo a basic health assessment before boarding, including a verbal health declaration and temperature checks.
Meal services will be suspended for flights within Southeast Asia and services to China. Passengers will be given a snack bag with water and refreshments when boarding instead.
All other flights will have meals provided.
READ: COVID-19: Mandatory for SIA, SilkAir and Scoot passengers to wear face masks on board, observe safe distancing
Those new measures are on top of existing precautionary measures, such as the suspension of hot towel service on board, and the removal of menu cards and seat back reading material such as magazines on all flights.
Cabin crew members and pilots will also have their temperatures taken before flights and will not report for work if they are unwell, said SIA. They will also wear masks and goggles or eye visors during flights.
Face masks are also mandatory for flights on Scoot, with passengers required to submit a health declaration form before checking in, and have their temperature taken.
All Scoot operating crew, who already undergo pre-flight temperature taking, must wear the appropriate PPE (Personal Protection Equipment) while on duty.
Cabin baggage will be limited to 3kg, down from the previous 10kg and 15kg in Economy and ScootPlus, respectively, for easier security clearance and boarding.
BOOKMARK THIS: Our comprehensive coverage of the coronavirus outbreak and its developments
Download our app or subscribe to our Telegram channel for the latest updates on the coronavirus outbreak: https://cna.asia/telegram
