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
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.
Singapore tightens quarantine rules for Hong Kong, Australia visitors
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.
03:07
When can we travel? Hong Kong companies aim to get Asia’s tourists safely moving amid pandemic
“Progress towards a global lifting of border controls and travel restrictions, which could facilitate or result in the easier movement of travellers between countries, is slower than earlier expected,” Singapore Airlines said on July 15.
The airline, which has raised about S$11 billion through loans and a rights issue in June, will hold its annual general meeting on Monday morning and release a first-quarter business update after trading hours on Wednesday.
Unlike many of its peers, the carrier has not cut any jobs, though it has redeployed some staff to work at hospitals and on the city state’s public transport network. The government is spending S$93 billion – 20 per cent of its gross domestic product – to help people stay in work and support businesses.
India’s rich take private jets to escape coronavirus-hit cities
Yet job cuts are not being ruled out at Singapore Airlines, the Straits Times cited Chief Executive Goh Choon Phong as saying last month. The carrier, whose shares are down 43 per cent this year, had about 28,000 staff as of the end of March.
Singapore Airlines is gradually restoring some routes, but there have been setbacks as fresh outbreaks flare up in places such as Melbourne, forcing it to suspend services to the Australian city.
The airline expects passenger capacity in August and September to only be about 7 per cent of pre-pandemic levels.