SIA reports S$142m net loss for Q3, as travel demand remains constrained

SINGAPORE Airlines (SIA) continued to be hit by the impact of the Covid-19 pandemic, running up a net loss of S$142 million in its third quarter.

The national carrier, in an exchange filing on Thursday, disclosed that its net loss for the three months ended Dec 31, 2020 was a reversal of the net profit of S$315 million recorded in the prior-year period.

It said in its business update: "International air travel demand remained severely constrained in the quarter, as border controls and travel restrictions continued to be in place in many countries amid new waves of the Covid-19 infection."

The group's passenger carriage for the third quarter shrank 97.6 per cent year on year. However, compared to Q2, the group recorded 44.8 per cent growth in passenger carriage, on the back of a near-doubling of capacity in the third quarter.

Group revenue plunged 76.1 per cent to S$1.07 billion for Q3, compared to S$4.47 billion the year before, as all three passenger airlines - SIA, SilkAir and Scoot - recorded sharp drops in passenger flown revenue.

For the nine months ended Dec 31, SIA reported a net loss of S$3.61 billion, compared to the S$520 million net profit a year ago.

Revenue for the nine months fell 78.9 per cent to S$2.7 billion, arising from the decline in passenger traffic. This was partially offset by higher cargo revenue, as movements of general cargo and pharmaceuticals, as well as strong e-commerce demand, kept yields high throughout the nine months.

SIA said it has added cargo capacity by stepping up the frequency of passenger aircraft operating cargo-only flights, and through the resumption of more passenger services. All seven freighters are fully utilised, with around 24 passenger aircraft also deployed on cargo-only services.

The group's fleet currently consists of 185 passenger and cargo aircraft, with the passenger network currently supported by 64 planes. SIA said: "More aircraft will be re-introduced into our operating fleet as the network gradually expands to match opportunities for re-opening."

By end-December, the group's passenger network covered 54 destinations including Singapore, compared to 43 at the end of September. SIA expects the group's total passenger capacity to be at around a quarter of pre-Covid levels as at the end of April.

Since the start of the financial year, SIA has raised approximately S$13.3 billion in additional liquidity, including the issuance of a US$500 million bond last month. It said discussions on sale-and-leaseback transactions are "at an advanced stage".

SIA said it continues to have access to more than S$2.1 billion in committed credit lines, along with the option to raise up to S$6.2 billion in additional mandatory convertible bonds before the annual general meeting in July this year.

"These liquidity measures will allow the group to be in a position of strength as it emerges from this crisis," SIA said.

In terms of outlook, the flag carrier said the resurgence of Covid-19 infections as well as the spread of more transmissible strains of the virus continue to weigh on international air travel.

"Nonetheless, in line with Singapore's progressive re-opening, the group expects to see a measured expansion of the passenger network over the coming months," SIA said.

"While cargo demand has tapered off after the traditional year-end peak period, strong fundamentals and healthy Purchasing Managers' Index readings across many key export economies will continue to support cargo demand in the coming months."

SIA said it "is well positioned to navigate the current uncertainties" and "will remain nimble and flexible" as it looks to seize all opportunities.

Shares of SIA closed unchanged on Thursday at S$4.17, before the business update.