SIA narrows loss to $142 million in Q3 on better operating numbers, lower write-downs

Revenue was $2.7 billion for the nine months to Dec 31, down from $12.795 billion during the same period a year earlier.
Revenue was $2.7 billion for the nine months to Dec 31, down from $12.795 billion during the same period a year earlier.PHOTO: ST FILE

SINGAPORE - Better operating numbers and lower write-downs saw Singapore Airlines report a lower loss in the third quarter compared with the previous three months.

The carrier racked up a net loss of $142 million for the three months to Dec 31 compared with a net profit of $315 million in the same period in 2019.

However, the latest figures were a significant improvement on the massive $2.34 billion loss in the July-September period.

Those second-quarter results were also marked by huge impairment write-downs in the wake of the Covid-19 pandemic.

Third-quarter revenue was $1.07 billion, less than a quarter of the $4.47 billion a year earlier but an improvement on second-quarter turnover of $783.8 million.

Revenue was $2.7 billion for the nine months to Dec 31, down from $12.795 billion during the same period a year earlier.

Net fuel costs declined $933 million or 77.3 per cent to $274 million as capacity cuts and lower prices reduced costs before hedging. It recorded a net gain of $63 million on fuel hedging and derivatives.

While operating conditions remain challenging, with most borders closed, SIA's cargo operations did relatively well servicing global supply chains.

Transporting vaccines is also boosting cargo operations, said a company spokesman.

SIA still sits on cash of $7.1 billion. It raised $13.3 billion last year through its rights issue and bonds.

With its cash burn at about $250 million a month, it should have enough financial firepower to last until the first quarter of 2024.

SIA has deployed 62 of its 185 planes, with the rest parked. All seven freighters and 24 passenger jets are on cargo-only operations.

SIA gradually reinstated services to key cities and mounted additional frequencies to existing destinations during the third quarter.

Its group's passenger network covered 54 destinations, including Singapore, as at Dec 31 compared with 43 three months earlier. Cargo covered 66 cities as at Dec 31.

SIA reinstated services to Dubai, Moscow and Munich last month, while Phuket will be reinstated as a SilkAir destination this month.

"Based on our current schedules, as of end-April 2021, the group's total passenger capacity is expected to be at around 25 per cent of pre-Covid levels, and we expect to serve around 45 per cent of the points that we flew to before the crisis," the airline said.

But the company - recently cited by Fortune Magazine as the second most admired company in Asia after Toyota - said it is well positioned to navigate the uncertainties and cement its leading position in the airline industry in the new normal.

It said it "will remain nimble and flexible... and act swiftly and decisively in a fast-changing aviation environment".

In short, the road to recovery remains long. But with green shoots starting to show, the airline is preparing to pull up to clearer skies.

Correction note: The word "million" was missing in the second paragraph after "$315". We are sorry for the error.