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Singapore Air shares fall most in two decades after record loss

·2-min read
This photograph taken on March 16, 2020 shows Singapore Airlines planes parked on the tarmac at Changi International Airport in Singapore. - Singapore Airlines announced on March 23 that it was cutting 96 per cent of its capacity till the end of April due to the COVID-19 novel coronavirus. (Photo by Roslan RAHMAN / AFP) (Photo by ROSLAN RAHMAN/AFP via Getty Images)
Singapore Airlines planes parked on the tarmac at Changi International Airport, 16 March 2020. (PHOTO: ROSLAN RAHMAN/AFP via Getty Images)

By Kyunghee Park

(Bloomberg) -- Singapore Airlines Ltd.’s shares fell to their lowest price in more than 21 years after the carrier posted its biggest quarterly loss ever as the coronavirus wiped out travel demand.

Shares fell as much as 5.1% to S$3.35, the lowest intraday price since September 1998, and traded at S$3.39 as of 10:48 a.m. in Singapore. The stock, which has declined by almost half this year, is the worst performer Thursday on a Bloomberg gauge of carriers in the Asia Pacific region.

Air traffic the world over has plunged because the pandemic led to tight border controls and a reluctance to travel. The International Air Transport Association said Tuesday the airline industry is unlikely to recover fully before 2024. The situation is particularly worse for carriers like Singapore Airlines that have no domestic market to cushion the blow.

The net loss in the three months to June was S$1.12 billion ($815 million), compared with net income of S$111 million a year earlier. Sales dropped 79% to S$851 million, and traffic measured by revenue passenger per kilometre sank 99.5%.

Singapore Airlines said Wednesday its passenger capacity still may be less than half of pre-coronavirus levels by the end of its fiscal year next March.

The carrier’s fuel hedging policy led to a S$535 million loss in the quarter, while there was also a S$127 million hit from the liquidation of NokScoot Airlines Co. Singapore Airlines owned a 49% stake in the low-cost Thai carrier that collapsed in June.

Singapore Airlines was operating only to 24 cities by the end of June. Its SilkAir unit ceased most operations except for flights to Chongqing, China, and it suspended flights to the Thai resort island of Koh Samui. Low-cost unit Scoot operated a minimal network to cities such as Hong Kong and Perth, Australia.

Passenger capacity at the end of the second quarter is forecast to be about 7% of the level before Covid-19. Out of a fleet of 213 passenger aircraft, only 32 are being deployed, the airline said.

© 2020 Bloomberg L.P.