Although honored as one of the best airlines in the world by Skytrax, the 5-star airline Singapore Airlines predicts that it will continue to witness another quarter of heavy losses after the COVID-19 cost it a significant decrease in passenger number.
The 5-star airline Singapore Airlines has warned that they anticipate the first quarter of this fiscal year will be at loss. They suffered a record loss of 732 million SGD (approximately 530 million USD) in the first three months of 2020 when fuel prices became unpredictable and the pandemic caused air travel to stall. This marks the first time in 48 years that Singapore Airlines have suffered such losses.
Net losses widened to 1.2 billion USD in quarter II and the revenue dropped by 87% due to a 96% drop in the passenger. Losses due to fuel risks will cause damage again, not to mention that this time they also suffered a loss of 124 million USD when NokScoot Airlines went bankrupt in June as it holds 49% of the shares in the low-cost carrier Thailand.
COVID-19 continues to do great harm to the global aviation industry and it is expected to take at least 3 more years to recover.
Singapore Airlines particularly suffered great losses because it depended mainly on international flights. This airline along with SilkAir and Scoot carried 17,700 passengers in June compared to 3 million in 2019.
“The process of removing border controls and travel restrictions may help cross-border travel become easier, but things are going slower than expected”, said Singapore Airlines on July 15.
The company raised 11 billion USD loans and issued stock options in June. Singapore Airlines will hold an annual meeting on Monday and announce updates on the business in the first quarter.
Singapore Airlines’ shares dropped by 0.3% in Monday morning trading to 3.61 SGD. Its total stock also decreased by 43% this year.
Unlike other competitors, Singapore Airlines did not cut jobs even though it had to relocate a few employees to hospitals and public transport networks. The Singapore government has spared 93 billion SGD, 20% of the country’s GDP, to support workers and businesses affected by the pandemic.
Until the end of March, Singapore Airlines still kept 28,000 jobs for its employees.
As the airline has gradually restored a few routes recently, the situation becomes complicated again in some destinations; Melbourne, for example, asked it to temporarily stop its flight operation there for the second time. This Singaporean airline forecasts air passengers in August and September will account for only 7% the number before the pandemic.