Despite having its worst year in history, Singapore Airlines (SIA) is confident that access to a plethora of new funding will allow it to establish itself as a competitive premium airline when the pandemic recedes.
General manager Goh Choon Phong said the money and resources his airline can use will ensure it remains flexible and nimble enough to keep up with normal return.
“The underlying demand for travel is actually very strong as we saw from booking when the Singapore-Hong Kong travel bubble was announced,” he said yesterday.
“But the virus situation is beyond our control. Nevertheless, we are optimistic that with the ongoing introduction of the vaccine and vaccination certificates, the trip will return.
“We look forward to calibrated limit openings in the coming months. And when that happens, we will be ready.”
In fact, with $ 7.8 billion in cash, access to unused credit of $ 2.1 billion, and now $ 6.2 billion in mandatory convertibles, the company appears well capitalized to its To meet needs for at least the next two years.
CFO Stephen Barnes noted that cash burn had dropped from about $ 350 million a month a year ago to $ 250 million in February, and is now between $ 100 million and $ 150 million. “We assume that the cash burn will stabilize at this level for the time being, although this may change depending on the conditions in the fuel market.”
Senior SIA officials answered questions from the media and analysts yesterday, a day after the airline reported a record $ 4.3 billion loss when passenger traffic fell 98 percent for the Covid-19 fiscal year ended March 31.
Total annual revenue fell 76 percent to $ 3.8 billion from a record $ 15.9 billion last year.
They indicated that much of the losses were non-cash impairment losses, including $ 1.73 billion for aircraft impairment, $ 497 million for ineffective fuel hedges, and $ 36.9 million for asset depreciation at SIA Engineering.
Thanks to the active supply chains for e-commerce, pharmaceuticals and electronics, freight operations remained a ray of hope for SIA during the challenging year.
Goh said freight will continue to lead as capacity utilization will steadily increase to 32 percent of pre-Covid-19 levels through July.
“While cargo demand remains robust, passenger demand will not be a smooth upward trend. New infections can flare up anywhere. But we now know that people who have been fully vaccinated are unlikely to be badly affected, and this is causing many countries to do so.” calibrated edge openings. “
In the meantime, the airline is pushing ahead with its transformation plan and strategic initiatives like the merger with its regional airline SilkAir and supporting the expansion of its India-based partner Vistara. It is also aggressively pushing its popular KrisShop franchise into the e-commerce arena.
Goh said that before the current outbreak of the pandemic, Vistara operated 80 percent at pre-Covid-19 levels.
He added that India, China and Southeast Asia would remain key markets for SIA as the airline continued to build opportunities in these areas.
In addition, alliances with partners such as Lufthansa, Scandinavian Air and Air New Zealand are being strengthened. Other alliances that were worked on prior to Covid-19 were with Malaysia Airlines and ANA of Japan.
Mr. Barnes responded to a question about the mandatory convertible bonds, noting that they will convert into shares when due. However, SIA is only required to pay interest and record that payment on its books if it decides to cash it at some point.
Mr Goh said fleet renewal will continue to be a priority to ensure the airline always has the latest and most fuel-efficient aircraft. Seven of their 19 A380 super jumbos are being retired.
The remaining 12 planes would be well used, he said.
