Big loss for Singapore Airlines
SINGAPORE – The Singapore Airlines group has recorded its first quarterly loss since the SARS crisis in 2003, blaming it on a combination of the global economic downturn, the outbreak of Influenza A (H1N1) and fuel hedging.
The group recorded a loss of S$307 million for the quarter ended June 2009. The company says if current depressed conditions continue, it expects to make a full year loss.
The airline’s operating loss was S271 million, against a profit of S$265 million previously.
SIA said several steps have been taken by the company to contain costs, including a freeze on hiring, unpaid leave, wage cuts and deferment of non-essential projects.
Together, the measures to trim staff costs will provide estimated savings of $60 million for the current financial year.
Group revenue fell 30 percent from April – June 2008, down by $1,260 million, as carriage and both passenger and cargo yields declined, the former reflecting increased competition and fare pressures.
The drop in the price of jet fuel provided relief of $1,140 million, partially offset by fuel hedging losses of $287 million (compared to hedging gains of $349 million last year).
The group recorded an operating loss of $319 million for the first quarter, against an operating profit of $343 million last year.
Ian Jarrett
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