Hot stock: Singapore Airlines slides to two-decade low after posting S$1.12b loss

FLAG carrier Singapore Airlines (SIA) on Thursday saw its stock price skid to its lowest in almost 22 years, after reporting a billion-dollar net loss for the latest quarter as travel demand "evaporated".

At around 10.22am, SIA shares had plummeted S$0.175 or nearly 5 per cent to S$3.355. This is the lowest intraday price since September 1998, according to Bloomberg data.

They then regained some ground to trade at S$3.41 as at 11.18am, which is S$0.12 or 3.4 per cent lower than Wednesday's close, with 14.7 million shares changing hands.

The stock has declined by almost half this year, and is the worst performer on Thursday on a Bloomberg gauge of carriers in the Asia-Pacific region.

SIA sank into a net loss of S$1.12 billion for its first quarter ended June 30, 2020, compared to a net profit of S$111 million a year ago, due to its weaker operating performance and financial impact of S$127 million from the liquidation of low-cost airline NokScoot.

Group revenue fell 79.3 per cent, dragged by the sharp drop in passenger flown revenue, but partially offset by improvements in cargo flown revenue. 

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Passenger carriage fell by 99.4 per cent for Singapore Airlines, 99.8 per cent for SilkAir, and 99.9 per cent for Scoot year on year, as air travel "evaporated" globally, the group said on Wednesday night.

The recovery trajectory in international air travel has been slower than what SIA had initially expected. Industry forecasts state that it will take two to four years for passenger traffic to return to pre-pandemic levels.

SIA believes that its passenger capacity may reach less than half of its pre-Covid-19 levels by the end of FY21. 

The plunge in air traffic around the world, due to border restrictions and passengers' reluctance to travel, has decimated earnings in the aviation sector. Carriers such as SIA with no domestic market to fall back on have been particularly hard hit.