SIA Group dives to a $1.12b loss in Q1
The fall in the group’s revenue was attributed to a plunge in its airlines’ passenger traffic.
Singapore Airlines (SIA) Group has sunk into a net loss of $1.12b in Q1 FY2021 from a net profit of $111m in Q1 FY2020, an announcement revealed. The group’s revenue also drastically dropped 79.3% from $4.1b to $851m over the same period.
The loss was driven by the weaker operating performance as well as the financial impact of $127m from the liquidation of NokScoot, consisting mainly of non-cash impairment of seven Boeing 777 aircraft. The group also swung into an operating loss of $1.04b in Q1 from the $200m operating profit in the same period last year.
The fall in revenue was attributed to a sharp drop in passenger flown revenue, as well as a plunge in passenger traffic for all three airlines. However, this was countered by a strong demand for urgent movements of personal protective equipment, pharmaceuticals and fresh foods, resulting in an improvement in cargo load factor.
Further, passenger carriage in Q1 plunged 99.4% YoY for SIA, 99.8% for SilkAir and 99.9% in Scoot. This totals to a 99.5% decline for the group. For Q2, SIA Group expected their passenger capacity to be about 7% compared to pre-COVID levels.
Group expenditure also nosedived 51.6% YoY to $1.89b from $3.9b, no thanks to lower net fuel cost and non-fuel expenditure. Net fuel cost dropped 86.8% as capacity cuts and lower fuel prices led to reduction of fuel cost before hedging, partially offset by fuel hedging losses. They also saw a reduction in expected fuel consumption as expected rate of capacity recovery is adjusted downward resulting in additional ineffective fuel hedges.