Singapore Airlines braces for hefty losses in Q1 as global travel hit by coronavirus

The airline’s net losses could widen to US$870 million through June because of a 96 per cent fall in capacity, analysts say

The airline expects passenger capacity in August and September to only be about 7 per cent of pre-pandemic levels

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An Airbus A380-800 aircraft of Singapore Airlines takes off from Zurich airport, Switzerland October 16, 2019. Photo: Reuters

Published: 2:40pm, 27 Jul 2020Updated: 2:40pm, 27 Jul 2020

Singapore Airlines, consistently voted one of the world’s best airlines by Skytrax, is poised for another hefty quarterly loss after the coronavirus pandemic left it flying a tiny fraction of its usual number of passengers.

The Singapore carrier warned this month that it expected a material operating loss in the first quarter of its financial year.

It already suffered a record net loss of S$732 million (US$530 million) in the three months through March, when it was hit by fuel-hedging losses as well as a collapse in demand triggered by the outbreak. That left the carrier with its first annual loss in its 48-year history.

The net loss could widen to S$1.2 billion (US$870 million) for the quarter through June and revenue may slump 87 per cent because of a 96 per cent drop in capacity, according to Bloomberg Intelligence analysts James Teo and Chris Muckensturm.

Fuel-hedging losses will again take a toll, and this time there are also S$124 million in liquidation costs for NokScoot Airlines. Singapore Airlines owned a 49 per cent stake in the low-cost Thai carrier that collapsed in June.

The coronavirus pandemic continues to torment the global aviation industry, which is forecast to take at least another three years to recover from the plunge in traffic caused by tight border controls and a reluctance to travel.