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Singapore Airlines reports $2.5bn net loss in first half

National carrier to retire 26 planes in response to weak demand

During the three months through September, Singapore Airlines’ group carried 98.8% fewer passengers than the same period the previous year.   © Reuters

SINGAPORE -- Singapore Airlines on Friday reported a net loss of 3.46 billion Singapore dollars ($2.57 billion) for the six months through September, as the COVID-19 pandemic continues to drain international travel demand. 

The airline had a net loss of SG$2.34 billion for the three months through September, its worst quarterly result ever, following a SG$1.12 billion net loss in the April to June quarter. 

Much of the red ink came from a SG$1.33 billion impairment charge on old aircraft. The company will remove 26 of its 222 aircraft, it said in a statement on Friday, saying the planes were "deemed surplus to fleet requirements after completion of a review of the longer-term network."

With no domestic routes to fall back on, the city-state's flagship carrier is one of the most severely hit airlines in Asia. Singapore is gradually reopening its borders to help its beleaguered transport industry, which is crucial to the country's role as a hub for Southeast Asia. But passenger travel demand remains feeble.

During the three months through September, Singapore Airlines' group, including short-haul brand SilkAir and low-cost brand Scoot, carried 98.8% fewer passengers than a year earlier. Cargo and mail volume dropped 44%, resulting in revenue for the latest quarter dropping more than 80% from the previous year.

At present, 143 of the airline's 222 passenger and cargo aircraft are grounded. The airline operated flights between Singapore and 43 destinations globally as of the end of September, up from 32 in June.

Although it has racked up big losses, Singapore Airlines' financial position remains strong, as it has raised SG$11.3 billion through the sale of new shares, backed by Singapore's state investor and top shareholder, Temasek Holdings, as well as other financing activities.

"The group continues to explore additional means to further strengthen during this period of uncertainty," the company said, adding that it has approval from shareholders to raise up to SG$6.2 billion in additional funds through convertible bonds.

Singapore Airlines said recovery from the pandemic is "likely to remain patchy, given the new waves of infections around the world and concerns about imported cases." But it said it is "ready to swiftly and decisively seize all opportunities, and respond to any adverse changes that may arise." 

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