SINGAPORE — The Singapore Airlines (SIA) Group recorded a 99.3 per cent year-on-year decline in passenger carriage in June, according to its operating results published on Wednesday (July 15).

Overall results improved marginally from May despite travel demand continuing to be severely impacted by the Covid-19 pandemic as flights slowly began resuming last month.

As border controls and travel restrictions remained in place around the world, overall passenger capacity was cut by 95.1 per cent and the passenger load factor fell to 12.2 per cent, said the group. This was an improvement over May's overall passenger capacity of 96.2 per cent and passenger load factor of 8.6 per cent.

SIA's capacity was 94 per cent lower compared to last year's, with only a "skeletal network" of flights in operation, connecting Singapore to 24 metro cities.

This was an increase from a capacity of 95.6 per cent and 14 cities in May, as transfers via Changi resumed.

The passenger carriage of SIA's regional arm SilkAir decreased by 99.7 per cent against a 97.5% cut in capacity in June, compared to May's 99.8 per cent decrease against a 99.6 per cent cut in capacity.

During June, SilkAir only operated flights to Chongqing, Kuala Lumpur and Medan, compared to only Chongqing in May.

Budget carrier Scoot’s passenger carriage declined 99.8 per cent against a 97.5 per cent fall in capacity, compared to May's 99.9 per cent against the same fall in capacity.

During June, Scoot temporarily ceased operations to West Asia and Europe, while maintaining flights to Hong Kong and Perth, and adding flights to Ipoh, Penang and Kuching.

SIA's Cargo load factor was 25.1 percentage points higher — with improvements recorded in all regions — as the capacity contraction of 61.2 per cent outpaced the 44.1 per cent decline in cargo traffic. This was a marked improvement from May's 14.4 per cent, amidst a decrease in capacity contraction and cargo traffic decline.

"Capacity contraction would have been much greater, save for the deployment of passenger aircraft on cargo-only flights," said SIA.

RECOVERY TRAJECTORY SLOWER THAN INITIALLY EXPECTED: SIA

In its report, the SIA Group said has also continued to review its capacity planning parameters.

"Our current view is that the recovery trajectory will be slower than initially projected, and will have a material impact on our revenue generation capability in the (2021 financial year)."

The lower capacity projection reduces expected fuel consumption, in turn rendering more fuel hedges ineffective and needing to be marked-to-market. With jet fuel prices remaining relatively low, SIA Group expects to record marked-to-market losses.

The SIA Group said it expects to report a material operating loss for the first quarter of FY2021.

Additional details will released on July 29, 2020, when a business update for the first quarter of FY2021 will be announced, it said.

In June, a green lane was established between Singapore and selected cities in China, with some restrictions on transit through Singapore also being lifted.

In May, SIA reported the first annual net loss in its 48-year history of S$212 million for the 12 months ending March 31, a reversal from the S$683 million profit in the previous year.

The national carrier also announced the formation of an internal task force to review its operations and to prepare for when air travel recovers. CNA

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