Singapore Airlines (SIA) Group reported that the strong performance of its cargo business helped cut its losses in the third quarter which was still mainly due to the collapse in passenger travel because of coronavirus-related restrictions.
The SIA Group reported an operating loss of S$331 million (US$248 million) for the three months ending December 31, compared to the S$449 million in operating profit it made the preceeding year. It's reported loss, however, was significantly better than the S$826 million in operating loss that it reported the previous quarter.
Its net loss for the period stood at S$142 million (US$106 million), reversing a S$315 million in net profit for the same period the previous year.
"Group revenue fell S$3,404 million (-76.1%) year-on-year to S$1,067 million during the third quarter, as all three passenger airlines within the Group recorded a sharp drop in passenger flown revenue due to low traffic," SIA said in its financial results.
"This was partially offset by improvements in cargo flown revenue, as the global airfreight capacity crunch continued to provide strong support for both load factors and yields," it added.
In response to the continued strong demand for pharmaceutical and e-commerce shipments, and an uptick in general cargo demand, SIA noted that it added capacity by stepping up the frequency of passenger aircraft operating cargo-only flights and through the resumption of more passenger services.
The utilisation of the freighter fleet was also maximised to deliver more cargo capacity.
The Group fleet currently consists of 185 passenger and cargo aircraft. It said the passenger network is currently supported by about 64 aircraft, while all its seven freighters are fully utilised, and around 24 passenger aircraft are deployed on cargo-only services.
SIA Group's cargo network comprises 66 destinations (including Singapore) as of end-December, up from 62 in September.
SIA Group noted that SIA Cargo successfully transported the first batch of Covid-19 vaccines to Singapore in December 2020 — demonstrating its readiness for the global logistical challenge of transporting and distributing Covid-19 vaccines around the world, and supporting the international efforts to recover from the pandemic.
Continued cargo demand cited despite capacity crunch
In its outlook, SIA Group said the resurgence of Covid-19 infections as well as the spread of more transmissible strains of the virus continue to weigh on international air travel. Nonetheless, it said in line with Singapore’s progressive re-opening, the Group expects to see a "measured expansion" of the passenger network over the coming months.
Airfreight capacity also remains constrained due to the steep reduction in passenger flights, and SIA said this has affected the bellyhold cargo capacity worldwide.
"While cargo demand has tapered off after the traditional year-end peak period, strong fundamentals and healthy Purchasing Managers’ Index readings across many key export economies will continue to support cargo demand in the coming months," it added.
The carrier noted that it also aims to secure its share of COVID-19 vaccine traffic to Asia and the Southwest Pacific.
"As the production of Covid-19 vaccine ramps up, SIA Cargo is looking to capture its share of the traffic to Asia and the Southwest Pacific region," it said.
Meanwhile, the Singapore-flag carrier said it is expecting to operate 25% of its pre-COVID levels by April 2021 and serve around 45% of the points that it flew to before the COVID-19 pandemic.
