Dhaka: Singapore Airlines on July 29 reported SGD 1.12 billion net loss in the first quarter of 2020 following drastic capacity cuts due to travel restrictions imposed globally amid the coronavirus pandemic.
In the same period last year, the airline reported SGD 111 million profit.
Revenue for the airline group slumped 79.3 per cent year-on-year to SGD 851 million in the first quarter, ended on Jun 30, while expenditure dropped 51.6 per cent to SGD 1.89 billion.
Overall passenger carriage fell 99.5 per cent - 99.4 per cent for Singapore Airlines, 99.8 per cent for SilkAir and 99.9 per cent for Scoot.
"The group entered the first quarter at a time when market conditions were deteriorating rapidly due to the spread of COVID-19 globally," said the airline.
"Demand for air travel evaporated as travel restrictions and border controls were imposed around the world to contain the spread of the virus," it added.
The drop in passenger flown revenue was partially offset by improvements in cargo flown revenue, said SIA, noting, the "strong demand" for the transport of personal protection equipment, pharmaceuticals and fresh foods.
"In addition to maximising freighter utilisation, SIA has proactively deployed passenger aircraft on cargo missions to further boost cargo capacity," it further mentioned.
SIA also claimed the recovery trajectory in international air travel is slower than initially expected, with industry experts such as the International Air Transport Association (IATA) and the International Civil Aviation Organisation (ICAO) projecting a slower recovery of global passenger traffic in the near term.
"Industry forecasts currently expect that it will take between two and four years for passenger traffic numbers to return to pre-pandemic numbers," said SIA.
By the end of this financial year, SIA expects that its group passenger capacity may reach less than half of pre-COVID-19 levels.
The airline said it was in talks with aircraft manufacturers to delay deliveries and progress payments to reduce cash outflows at a time when the majority of its fleet of 220 planes remains parked.
"We have reached agreement with Airbus on some of these matters and discussions with Boeing are ongoing," it noted.
The airline added that it is reviewing the size and shape of its fleet over the longer term, which is likely to lead to a material impairment in the value of older aircraft, particularly the Airbus A380, which would account for SGD 1 billion.
SIA plans to operate around 7 per cent of its normal passenger capacity in August and September.
The global air freight capacity is also expected to "remain constrained in the near term due to significantly lower bellyhold cargo capacity worldwide," SIA said.
It said that with the progressive reopening of economies and as manufacturing resumes, there is likely to be a gradual pickup in general cargo demand even as urgent movement of medical supplies recedes.
Since the start of the financial year, the airline has increased liquidity by SGD 11 billion through a rights issue of new stock and secured financing facilities.
Its shares closed down 1 per cent at SGD 3.53 before the results announcement, having hit a low of SGD 3.52, their lowest since 1998.