With no domestic market to rely on, Singapore Airlines has seen passenger numbers plummet by 98.6% for the month of September when compared to the same month in 2019. Additionally, the volume of cargo carried in September 2020 compared to September 2019 fell by 42.3%. The result of the global pandemic has seen the airline cut 4,300 jobs and ground much of its fleet, with little sign of change other than a slight increase in cargo demand.
According to the International Air Transportation Association (IATA) it is unlikely carriers will return to pre-pandemic levels until 2024, while Raymond Yap, an analyst at CIMB, believes the airline will continue to lose money for the next three years.
Singapore Airlines is also being hit hard by a SG$1.3 billion impairment charge which is connected to the withdrawal of 26 older aircraft, including seven Airbus A380 superjumbos. Revenue for the quarter fell 81% to SG$783.8 million compared to the same quarter 2019, generating a SG$2.34 billion loss compared to a quarterly profit in 2019 of SG$94.5 million.
To help counteract the effects of the pandemic on air travel, Singapore Airlines confirmed back in March that it would raise SG$5.3 billion in equity and up to SG$9.7 billion in convertible bonds in a deal backed by its majority shareholder, state fund Temasek Holdings. The airline indicated in mid-October that SG$6.2 billion of the funds had been used to date to repay a bridging loan, refund tickets, service debt, pay for aircraft and fund operating expenses. It is believed there currently remains SG$1.9 billion of credit lines and up to SG$6.2 billion of convertible bonds available. (US$1.00 = SG$1.35 at time of publication.)
