Singapore Airlines first-quarter loss narrows on cargo demand boost

The airline lacks a domestic market and is solely reliant on international travel

  
Singapore Airlines planes sit on the tarmac at Singapore's Changi Airport March 11, 2020.

Singapore Airlines planes sit on the tarmac at Singapore's Changi Airport March 11, 2020.

REUTERS/Edgar Su

Singapore Airlines Ltd (SIA) on Thursday posted a S$409 million ($302 million) first-quarter loss, narrower than a year earlier, helped by a strong air cargo market and no major impairments.

The airline forecast passenger capacity to reach 33% of pre-pandemic levels in the second quarter, and said it would serve at least 50% of locations it did before by the end of September.

The airline, like Hong Kong rival Cathay Pacific Airways Ltd, lacks a domestic market and is solely reliant on international travel at a time when most borders remain closed.

SIA carried 132,600 passengers in the month of June, an improvement on its June 2020 figures but a 96% fall from the same month two years earlier, before the pandemic hit.

It filled just 16.1% of seats in June, with its flights heavily reliant on cargo for revenue at a time when the freight market is strong.

The company posted a record S$1.1 billion loss in the first quarter a year earlier.

Revenue in the just-ended quarter came in at S$1.30 billion, up from S$851 million a year earlier.

Cargo flown revenue grew 32.4% and the company said demand fundamentals for the business remained strong, even though fresh pandemic-related restrictions in parts of the world could cause short-term uncertainty.

SIA, unlike rival national carriers in Southeast Asia, still has a healthy cash balance to help it get through a period of low travel. It recently raised S$6.2 billion of convertible bonds underwritten by its largest shareholder, state investor Temasek Holdings.

The airline also said 98% of active pilots and cabin crew have been vaccinated.

($1 = 1.3544 Singapore dollars)

(Reporting by Nikhil Kurian Nainan in Bengaluru and Jamie Freed in Sydney; Editing by Sriraj Kalluvila) ((Jamie.Freed@thomsonreuters.com;))


More From Equities