Singapore Airlines plunges into US$3.20 billion annual loss amid weak travel demand
- The carrier filled just 13.4 per cent of passenger seats in the financial year ended March 31
- The company said it would issue S$6.2 billion of convertible bonds to help weather the coronavirus crisis
The loss for the 12 months ended March 31 was worse than the average S$3.27 billion forecast by eight analysts, according to Refinitiv, and included S$2 billion of impairments largely on the 45 older planes surplus to requirements.
It was also far bigger than the S$212 million annual loss in the prior financial year, its first ever dip into the red, when only one quarter was affected by the pandemic.
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Annual revenue fell 76.1 per cent to S$3.82 billion in the financial year ended March 31, with strong cargo revenues not enough to offset an almost 98 per cent fall in passenger numbers.
The airline said it expected passenger capacity to rise to 28 per cent of pre-pandemic levels by June, but much of that is due to strong freight demand sustaining the number of flights. It filled just 13.4 per cent of passenger seats in the financial year ended March 31.
Cathay, which reported a record annual loss of HK$21.6 billion (US$2.8 billion) for 2020, raised US$650 million by selling a US-dollar denominated bond for the first time in about three decades.
The airline plans to use the bond proceeds as working capital and for general corporate purposes, according to a terms sheet seen by the South China Morning Post. The fundraising comes less than a year after the carrier received a HK$39 billion (US$5 billion) bailout from Hong Kong’s government.
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“This crisis is not over,” Singapore Airlines Chairman Peter Seah said in a statement. “While the growing pace of vaccinations has given us hope, new waves of infections around the world mean that restrictions on international travel largely remain in place.”
Like other carriers globally, Singapore Airlines has cut jobs, deferred aircraft deliveries and raised equity and debt financing to help get it through the pandemic.
Additional reporting by Alison Tudor-Ackroyd
