The combination of the global economic downturn, the outbreak of Swine flu, and fuel hedging resulted in a loss of $307 million for Singapore Airlines Group for the first quarter ended June 2009. This is the first quarterly loss since the SARS crisis in 2003.
Group revenue fell 30 per cent from April-June quarter last year, down by $1,260 million, as carriage and both passenger and cargo yields declined, the former reflecting increased competition and promotional fare activities.
Although expenese were down nearly 16 per cent, the benefit of the drop in jet fuel prices (provided relief of $1,140 million) were 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. Two companies in the group, the ground-handling company and engineering services made a profit.
Singapore Airlines made a loss of $271 million, agianst a profit of $265 million in the same quarter last year, the SATS Group made a profits of $44 million, SIA Engineering made a profit of $12 million. The low-cost carrier Silk Air reported a loss of $3 million (against profit of $10 million same quarter last year) while the cargo business, SIA Cargo made a loss of $104 million (against profit of $5 million).
The airline group has initiated several steps to contain costs, which includes freeze on hiring, unpaid leave, wage cuts and deferment of non-essential projects. These measures will provide estimated savings of $60 million for the current financial year.
