Turbulent times for SIA as Covid-19 calls time out to air travel

LATE in June, Singapore Airlines (SIA) said the board of NokScoot - a Thailand-based mid-haul low-cost carrier (LCC) in which it has a 49 per cent effective stake through subsidiary Scoot - has passed a resolution to liquidate the troubled airline amid the Covid-19 crisis.

While NokScoot's associate value on the SIA book is currently zero given ongoing losses, SIA will record a total one-off charge of S$123.6 million for the first quarter ended June 30, 2020. This comprises a S$106.9 million charge mainly due to impairment of SIA's book value of seven Boeing 777-200 aircraft which had been leased to NokScoot, and provisions by Scoot of S$16.7 million to cover its share of liquidation and related costs.

The joint venture with Thailand-based airline Nok Air has been unable to record a full-year profit since its inception in 2014, due to difficulties in growing the network and the intense competitive environment. The Covid-19 pandemic compounded its woes.