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SINGAPORE: SIA Group reported a first-half net loss of S $ 3.5 billion on Friday (Nov 6) amid a “sharp drop” in passenger traffic as the COVID-19 pandemic continues .
Passenger numbers fell 98.9 percent due to strict global border controls and travel restrictions, it said in a press release.
Group revenues decreased S $ 6,690 million year-on-year to S $ 1,630 million in the first half of the financial year, 80.4% less. Passenger flight revenue fell sharply as Singapore Airlines (SIA), SilkAir and Scoot were severely affected by international travel restrictions.
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SIA Group said the decline in group revenue was partially offset by higher revenue from cargo flown, which increased by S $ 274 million, as countries sought to restore global supply chains.
“SIA responded to the demand by maximizing the utilization of freighters and deploying passenger aircraft on cargo missions,” the group said.
Group spending decreased S $ 4.41 billion year-on-year to S $ 3.5 million. The 55.8% drop was largely due to lower non-fuel expenses and net fuel cost.
The net loss reported for the first half of the year ended September 30 was mainly driven by deterioration in operating performance, the group said.
The loss also included an impairment charge of S $ 1.33 billion related to the disposal of 26 prior generation aircraft and a S $ 127 million charge for the liquidation of NokScoot.
NokScoot is a joint venture between Scoot and the Thai-based airline Nok Air.
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Following the reduction of around 4,300 positions across the group’s three airlines, SIA Group said steps were taken to reduce the number of staff members that would be affected by the involuntary release, including pay cuts, hiring freezes, open vacancies. that were not covered, a retirement plan and voluntary release plan for staff members.
“These measures reduced the number of employees affected by the workforce rationalization exercise to around 2,000. The group incurred a cost of S $ 42 million in this exercise,” he added.
FLEET AND NET
Including aircraft deemed in excess of requirements, the previous 26 generation and the seven previously operated by NokScoot, the SIA Group said its fleet currently consists of 222 passenger and cargo aircraft.
The group said its passenger network is supported by around 39 aircraft, while the seven freighters are fully utilized with around 33 passenger aircraft deployed in cargo-only services.
“We have parked 114 aircraft at Singapore’s Changi Airport, while 29 aircraft are in storage at Alice Springs. We will continue to be agile and will be able to efficiently reintroduce parked and stored aircraft into our operations when necessary,” he said.
In the coming months, the group said that Singapore Airlines and SilkAir will restore passenger services to Brunei, Dhaka, Fukuoka, Johannesburg, Kathmandu, Male and Penang. Scoot will also resume services to Melbourne.
Singapore Airlines will also launch non-stop flights three times a week from Singapore to New York’s John F Kennedy International Airport on November 9.
PANORAMA
The group said the recovery from the COVID-19 pandemic is “likely to remain patchy” given new waves of infection around the world and concerns about imported cases into countries.
Despite this, the SIA Group said that customers are becoming safer about air travel given the robust health and safety measures that airlines, airports and governments have put in place.
A progressive recovery in general cargo demand is also expected, with strong and continued demand from the pharmaceutical and perishables segments.
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“Cargo demand is also exempt from getting a boost from days of big e-commerce sales and new product launches,” the group said.
“Amid the uncertain and highly volatile environment, the Group, with its portfolio of low-cost, full-service airlines, is ready to quickly and decisively seize all opportunities and respond to any adverse changes that may arise,” he added.
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