Singapore Airlines Posts Record $3.2 Billion Annual Loss, to Issue Convertible Bonds

May 19, 2021 Updated: May 19, 2021

Singapore Airlines Ltd on Wednesday posted its second-consecutive annual loss, which widened to a record S$4.27 billion ($3.20 billion), and said it would issue S$6.2 billion ($4.66 billion) of convertible bonds to help weather the coronavirus crisis.

The loss for the 12 months ended March 31 was worse than the average S$3.27 billion ($2.46 billion) forecast by eight analysts, according to Refinitiv, and included S$2 billion ($1.5 billion) of impairments largely on the 45 older planes surplus to requirements.

It was also far bigger than the S$212 million ($159 million) annual loss in the prior financial year, its first-ever dip into the red, when only one quarter was affected by the pandemic.

Annual revenue fell 76.1 percent to S$3.82 billion ($2.87 billion) in the financial year ended March 31, with strong cargo revenues not enough to offset an almost 98 percent fall in passenger numbers.

The airline said it expected passenger capacity to rise to 28 percent of pre-pandemic levels by June, but much of that is due to strong freight demand sustaining the number of flights. It filled just 13.4 percent of passenger seats in the financial year ended March 31.

The airline, which has no domestic market, has been one of the world’s hardest-hit in terms of passenger traffic alongside its Hong Kong-based rival Cathay Pacific Airways Ltd.

A proposed travel bubble between Singapore and Hong Kong that had been due to start on May 26 was postponed for the second time on Monday after a recent rise in COVID-19 case numbers in Singapore.

“This crisis is not over,” Singapore Airlines Chairman Peter Seah said in a statement. “While the growing pace of vaccinations has given us hope, new waves of infections around the world mean that restrictions on international travel largely remain in place.”

Like other carriers globally, Singapore Airlines has cut jobs, deferred aircraft deliveries, and raised equity and debt financing to help get it through the pandemic.

The airline said it would issue S$6.2 billion ($4.66 billion) of mandatory convertible bonds that were an optional part of a S$15 billion ($11 billion) rescue package led by its majority shareholder, state investor Temasek Holdings last year.

By Jamie Freed