SIA spends half of $8.8 billion raised through rights issues amid Covid-19 pandemic

Singapore Airlines has taken steps to significantly reduce its monthly expenditure since the Covid-19 pandemic hit.
Singapore Airlines has taken steps to significantly reduce its monthly expenditure since the Covid-19 pandemic hit.ST PHOTO: CHONG JUN LIANG

SINGAPORE - Singapore Airlines (SIA) has spent half of the $8.8 billion that it raised through its rights issues, as airlines continue to be battered by the Covid-19 pandemic that has paralysed air travel.

Of the total amount, $2.5 billion has been used for one-off items.

This comprises $2 billion to repay a bridge loan that was taken to tide the company over from March to June until the proceeds of the rights issues came through in early June.

Another $500 million was used to redeem SIA's 10-year bonds.

The remaining $1.9 billion was used for ticket refunds and repayment of funds previously drawn under certain lines of credit.

It was also used to meet the company's operating and capital expenditure in June and July, SIA said in an announcement to the Singapore Exchange on Wednesday (Aug 19).

SIA raised the funds in June, after the Covid-19 outbreak and resulting border restrictions emptied the skies and kept planes grounded.

The airline industry is unlikely to recover fully before 2024, the International Air Transport Association said last month.

Since the start of the Covid-19 pandemic, SIA has taken steps to significantly reduce its monthly expenditure, a spokesman told The Straits Times.

 
 
 

This includes the deferral of non-essential projects and discussions with aircraft manufacturers to defer the delivery of aircraft.

"SIA has also cut the salary of all staff members, we have asked people to go on furlough and offered various no-pay leave schemes, and we have introduced voluntary early release schemes", he said.

The airline said: "We will continue to pursue cost management measures and will also explore additional means to shore up our liquidity as necessary."

To curb costs, the Singaporean carrier has slashed salaries and put staff on unpaid leave as it operates at less than 10 per cent of capacity.

SIA posted a first-half loss of $1.85 billion as the pandemic wiped out passenger traffic. Cathay Pacific lost HK$9.9 billion (S$1.78 billion) and Qantas A$1.96 billion (S$1.92 billion).