The Singapore Airlines (SIA) Group announced a net loss of SGD $3.46 billion (~USD $2.6 billion) during the first half of the fiscal year (FY) amid the COVID-19 pandemic. It has also announced plans to remove 26 aircraft after a review of its long-term network.
In its latest financial report, the airline attributed the loss to the aviation demand downturn as it saw its worst quarterly result during the first quarter of FY 2020 (July and September) of around SGD $2.34 billion. It follows a first quarter loss of SGD $1.12 billion.
Of the costs brought upon the airline, SIA Group cited an impairment of SGD $1.333 million on the values of older generation aircraft as it plans to remove 26 jets from its fleet of 222. The airline states the planes were "deemed surplus to fleet requirements after completion of a review of the longer-term network."
Among the 26 jets that will be removed from the fleet (as of July 2020) include 7 Airbus A380s, 4 Boeing 777-200/ERs, 4 Boeing 777-300s, 9 Airbus A320s, and 2 Airbus A319s.
Another charge mentioned was a SGD $127 million liquidation of Thailand-based NokScoot. The charge is based on the impairment of the 7 leased Boeing 777 jet and the SIA Group's share of related costs for the carrier.
With Singapore not having any domestic network of flights, the airline is looking to the city's ability to restore its status as a key travel hub in the region and the easing of international flight restrictions.
With health and safety regulations and practices, the airline is looking to take advantage of opportunities such as the bilateral Air Travel Bubble between Singapore and Hong Kong which the airline mentioned in its release. The airline group stated: “As Singapore and some of the key air hubs globally look to reopen borders in a careful and calibrated manner, we are closely engaging relevant stakeholders to ensure the safe resumption of air travel.”
The airline group is also looking to continued growth in cargo demand, though it points to its constraints in cargo capacity. “Industry airfreight capacity is “anticipated to remain constrained as a result of fewer passenger flights and hence lower bellyhold capacity,” the airline group stated. SIA Group is expecting to see an increase in demand and serving them with the use of modified passenger jets to carry cargo.
While it continues to monitor the current situation, the airline ended its statement saying: “Amid the uncertain and highly volatile environment, the Group, with its portfolio of full service and low cost airlines, is ready to swiftly and decisively seize all opportunities and respond to any adverse changes that may arise.”