Singapore Airlines lost over a billion dollars in profit in its Fiscal Year 2019-2020 as the airline group was hit hard by the restrictions of Covid-19. From a $1.067 billion operating profit the previous year it ended the FY2019-20 with just a $59 million operating profit.
Everything went wrong for the SIA Group in its Q4 between January and March-quarter when the airline literarily came to an almost standstill. At first, Covid hurt operations to China and within Asia, but from March, Europe, North America, and soon other regions followed by travel bans. Singapore has reduced operations by 96 percent, mostly continuing cargo flights with its full freighters and cargo-only services on passenger aircraft.
It showed in Q4 in particular. From a $253 million operating profit the previous year it ended the quarter with a $-803 million operating loss.
Net loss for the SIA Group for the full year was $-212 million compared to a $683 million profit last year. Revenues were $15.976 billion versus 16.323 billion, only 2.1 percent down. In Q4, this was tenfold at -21.9 percent when revenues plummeted from $4.0 billion to $3.1 billion.
SIA profitable, Silk Air and Scoot not
By airline, Singapore Airlines was profitable for the full year, recording a $294 million profit compared to 991 million in FY2018-19. While Q3 was strong, Q4 ended with a $-583 million loss. Expenditures increased, mainly attributable to a $587 million loss on ineffective fuel hedging partly offset by $350 million in lower fuel costs. Passenger numbers dropped by 25 percent in Q4 to 3.8 million.
Silk Air recorded a $112 million loss compared to a $15 million profit the previous year. It lost $100 million in Q4 alone and flew 36.7 percent fewer passengers. Scoot lost $-198 million versus a $-15 million loss last year, with Q4 costing the airline $-125 million with 23 percent fewer passengers. Both subsidiaries suffered a combined $123 million of ineffective fuel hedge losses.
The only profitable subsidiary throughout the year was SIA Engineering, which ended FY2019-20 with a $68 million profit (versus 57 million) and even in Q4 recorded $14 million in black numbers. Lower revenues were compensated by lower expenditures.
SIA is unable to offer guidance for the year as the recovery of its operations is most uncertain. The group’s airlines will retain a minimal flight schedule for the foreseeable period, at the same time trying to maximize options offered within the cargo business. Singapore has reduced costs but has kept its 16.700-strong workforce as much as possible.
The Group bolstered its liquidity position by issuing bonds and shares in March. Once completed in June, it expects to have raised $8.8 billion in cash. It has the option to issue additional convertible bonds which total $6.2 billion. By the end of March, the Group had $11.8 billion in debt.
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
Richard is contributing to AirInsight since December 2018. He also writes for Airliner World, Aviation News, Piloot & Vliegtuig, and Luchtvaartnieuws Magazine. Twitter: @rschuur_aero.
