Singapore Airlines vows to emerge stronger as losses narrow

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November 12, 2021
Singapore airlines
Photo: Singapore Airlines.

The Singapore Airlines (SIA) Group has vowed to emerge from the COVID-19 pandemic stronger than before as it reported a significantly lower S$837 million first-half net loss, down from a crippling S$3.47 billion in the same period a year ago.

But the Singaporean airline group continues to feel the pain of COVID, revealing passenger capacity will still be just 43 percent of pre-COVID levels by December as it serves just over half of its pre-pandemic ports, or 73 destinations including Singapore.

Citing an improved passenger outlook, SIA said it remained ready to capitalize on revenue and growth opportunities as they arise and it would adjust its capacity accordingly “while maintaining operational resilience and cost discipline”.

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“Since the start of the pandemic, the group has proactively taken steps to review all aspects of our operations to ensure that we are able to quickly ramp up as air travel recovers,’’ it said in its outlook.

“The SIA Group remains steadfast in its commitment to emerge stronger from the pandemic, as it forges ahead in the second year of its three-year transformation journey.

“We have pressed on with initiatives to drive digital leadership and deliver world-class product and services while prioritizing a seamless customer journey with robust health and safety standards. “

Singapore began re-opening its borders in early September with the establishment of Vaccinated Travel Lane (VTL) with Germany and Brunei.

SIA Group’s VTL network currently stands at 21 cities in 14 countries after the VTL system was expanded to include Australia, Canada, Denmark, Finland, France, Italy, Malaysia, the Netherlands, South Korea, Spain, Sweden, Switzerland, the UK, and the US.

Growth in the fourth quarter included services to Cape Town, Kathmandu, Manchester, and Rome, while low-cost offshoot resumed flying to Berlin.

The improved passenger outlook also prompted SIA to announce the return of the  Airbus A380 with operations to London starting November 18 and to Sydney from December 1.

Routes in the pipeline include Houston (via Manchester) from December 1 and Singapore-Seattle-Vancouver  from  December 2. Scoot starts flight to Seoul Incheon from November 15 and Davao in the Philippines from December 1.

From a financial perspective, The group’s operating loss shrank from S$1.86 billion in the first half of fiscal 2021 to S$619m in the latest period as revenue surged to S$2.8billion thanks to improvements in both the passenger and cargo segments.

Passenger flown revenue rose by 358 percent to S$598 million and cargo flown revenue reached a record high of S$1.875 billion, up 51.2 percent.

Expenses were down by 1.5 percent to S$3.45 billion, thanks mainly due to the absence of ineffective fuel hedges.

Unlike many of its South-East Asian rivals, SIA has managed to bolster its cash and bank balances, which rose S$4.7 billion during the half to S$12.5 billion primarily due to the issue of mandatory convertible bonds.

Fleet changes included the transfer of six Boeing 737 MAX 8 aircraft from SilkAir to SIA after the Civil Aviation of Singapore removed restrictions imposed on the Boeing planes in the wake of two fatal crashes.

One A350 was delivered in the first quarter and began operating in the second quarter, while the last Airbus A330 exited the operating fleet.

At the end of September 2021, SIA’s operating fleet comprised 121 passenger aircraft and seven freighters, while Scoot added an A321neo to bring its fleet size to 50 passenger aircraft.

The average age of the fleet was six years, which the airline said was one of the world’s youngest.