COVID-19 flight disruptions lead to millions of losses: Saudi Ground Services

Saudia unit reports $23mln net loss for third quarter of 2020

  
Image used for illustrative purpose. An airplane belonging to Saudi Arabian airlines waits at the gate at JFK airport as photographed on November 30, 2011 in New York City.

Image used for illustrative purpose. An airplane belonging to Saudi Arabian airlines waits at the gate at JFK airport as photographed on November 30, 2011 in New York City.

Getty Images/Bruce Bennett

The disruptions caused by the coronavirus pandemic have resulted in significant losses for Saudi Ground Services, a unit of national carrier Saudi Arabian Airlines (Saudia), the company said on Sunday.

The ground handling services provider reported a net loss of $23.14 million for the third quarter of 2020 and a decrease in revenue by 61 percent ($110 million).

“[The net loss was] due to the suspension of majority of international flights as a result of the precautionary measures taken by the government on the outbreak of COVID-19,” the company said in a statement to the Saudi Stock Exchange (Tadawul).

“The COVID-19 has indirectly impacted the equity accounted investment resulting in reduced profit share amounting to 2.3 million riyals compared to same quarter of last year,” it added.

However, the company assured that despite the challenges, it has rolled out several initiatives to alleviate the impact of the pandemic and maintain competitiveness at the same time.

The initiatives, it added, have helped the company reduce the losses to 86.8 million riyals, considerably lower than the estimated losses of 293.8 million riyals.

“In addition to cost reduction initiatives, the company has taken certain [measures] such as the opportunity to increase sales by providing disinfection services for aircraft, in addition to other services whose sales exceeded 32 million riyals, contributing to further reduction on the impact of the pandemic on the company’s profitability,” the company said.

Flights in and out of Saudi Arabia were suspended on March 15 as part of the precautionary measures to stem the spread of coronavirus.

The kingdom’s national airline announced the resumption of flights to 20 international destinations only last month.

All the travel restrictions related to the pandemic are expected to be lifted only from January 1, 2021.

(Reporting by Cleofe Maceda; editing by Mily Chakrabarty)

Cleofe.maceda@refinitiv.com

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© ZAWYA 2020

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