Singapore Airlines records biggest quarterly loss, retires 26 aircraft

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SIA lost S$2.3 billion ($1.7 billion) in the second quarter and will retire older aircraft including seven A380s

Singapore Airlines Group, which includes its regional subsidiary SilkAir and low-cost carrier Scoot, swung to a record net loss in the three months to 30 September. It posted a quarterly profit of S$94.5 million the year before, according to Reuters. 

As Singapore and other countries closed their borders, the flag carrier saw passenger traffic plunge by 99 per cent. Unlike many of its competitors, SIA does not have a domestic market to hedge against the collapse in international demand.

The airline said it will retire 26 older aircraft “deemed surplus to fleet requirements”, including two A319s, nine A320s, seven A380s, four B777-200s, and four B777-300s. While negotiations are underway with Boeing, it reached an agreement with Airbus to defer aircraft deliveries. SIA has a backorder of A320neos, A321neos, A350s, B737-8s, B777-9s, and B787s, according to CH-Aviation.

It will also transition SilkAir’s narrow-bodied operations into its mainline fleet, following a merger announced in 2018. The first SIA-branded B737-800 enters service in the first quarter of 2021.

Looking ahead, Singapore and Hong Kong’s bilateral travel bubble, with a stringent testing mechanism, could pave a way forward, the airline said. If successful, it would prove that quarantine measures, a major deterrent to air travel, could be safely removed.

As Singapore and some of the key air hubs globally look to reopen borders in a careful and calibrated manner, we are closely engaging relevant stakeholders to ensure the safe resumption of air travel,” said the airline in a filing. “This includes working with partners to facilitate Covid-19 testing for travellers, digitising test results and integrating the verification into the check-in process. These efforts will help to reduce travel friction and anxiety for our customers.”

In recent months, SIA has also sought to grow non-airline revenue streams by launching its retail-focused Kris+ app and Singapore Airlines Academy to provide training for external businesses.

Industry body the International Air Transport Association (IATA) estimates that airlines operating in the Asia-Pacific region stand to lose a combined $27.8 billion this year. IATA forecast in July that global air traffic is unlikely to return to pre-coronavirus levels until at least 2024 — a year later than previously projected.