Singapore Airlines has announced that it is expecting to report a material operating loss for the first quarter of the 2020/21 financial year, as well as expecting to see the carrier experience its first annual loss since its founding, in January 1972.
The news comes after the airline reported a record net loss of US$531 million in the March quarter, impacted heavily by the instantaneous drop off in travel demand amid the COVID-19 pandemic, as well as fuel-hedging losses.
According to Bloomberg analysts, losses could balloon past US$870 million for the June quarter, after the airline reported an 87 per cent drop in revenue, off the back of a 96 per cent drop in capacity.
Fuel-hedging losses could again rear their head in the June quarter, due to falls in oil prices over April and May, while the one-off US$90 million expense for the liquidation of Thai joint-venture NokScoot would also need to be taken into account.
Further growth of the airline will be heavily reliant on international borders and the easing of travel restrictions, the airline said, while the company expects that passenger traffic could take two to four years to recover to pre-COVID levels.
“Progress towards a global lifting of border controls and travel restrictions, which could facilitate or result in the easier movement of travellers between countries, is slower than earlier expected,” Singapore Airlines said.
The airline expects passenger capacity in August and September to only be about 7 per cent of pre-pandemic levels.
Notably, Singapore Airlines has, to date, not cut any jobs in order to save cash, although it has made moves to redeploy some staff to work at hospitals, or in the city-state’s public transport network throughout the period of the pandemic.
The Singaporean government is reportedly spending US$67 billion, or approximately 20 per cent of gross domestic product, to assist citizens in retaining their jobs and supporting businesses.
However, the airline’s CEO has been reported saying that job cuts to its currently 28,000-strong workforce is not entirely out of the question.