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31 July 2009

Singapore Airlines posts first quarterly loss six years

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Singapore Airlines (SIA) reported on Thursday a loss of $212.5 million for the quarter ended June 2009, the first such loss since the SARS crisis in 2003, Chinese news agency Xinhua reported.

The loss was attributed to the global economic slowdown and the outbreak of A/H1N1 flu, contributing to the decline in cargo and passenger demand. Fuel hedging also added to the loss.

According to an SIA statement, the group recorded an operating loss of S$319 million ($223.08 million) for the quarter, against an operating profit of S$343 million ($239.86 million) last year.

Revenue fell 30.5 percent to S$2.87 billion ($2.01 billion) from S$4.13 billion ($2.89 billion) a year ago.

SIA said it has taken several steps to contain costs, including a freeze on hiring, unpaid leave, wage cuts and deferment of non-essential projects.

Together, these measures to trim staff costs will provide estimated savings of S$60 million ($41.96 million) for the current financial year. The company has also adjusted capacity to match demand during the quarter, by suspending services and reducing frequencies on various routes.

It said though the price of jet fuel is less than half its peak last year, it remains volatile. However, it added that hedging losses are expected to taper off over the course of the financial year as they are settled.

"The group's first quarter performance reflected the adverse business conditions for airlines. If these conditions continue, the group expects to make a loss for the full year," the airline said.


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