Leading Asia-Pacific carrier Singapore Airlines (SIA) is caught between a rock and a hard place, much like any other airline in this prolonged global recession. Positioned as a premium global brand, SIA is struggling in 2009 to offset a decline in demand in the commercial sector. This, coupled with losses from hedging fuel, higher unit costs, and taking delivery of five Airbus 380s by January 2010 or risk paying heavy penalties for delay, the airline, which flies to about 35 countries, must rely on its historically strong performance to weather out this down cycle.
Singapore Airlines posted its first loss since the SARS health crisis in 2003. Loss for the first quarter of 2009 to 2010 year amounted to SDR $271 million, versus a profit of $265 million previously. Meanwhile regional carrier SilkAir (a subsidiary) incurred a loss of $3 million over a profit of $10 million. SIA Cargo was in the red at $104 million, down from a profit of $5 million during the prior period. The airline in a press release dated July 30, 2009, attributed the losses to the global economic downturn, the outbreak of influenza A (H1N1), and fuel hedging losses of $287 million, compared to gains of $349 million during the corresponding period the previous year. The company plans to cut back on non-fuel costs through reducing staff expenses by $60 million and negotiating with vendors to reduce costs. Traffic and Capacity
Passenger and air cargo traffic in September 2009 continued to nosedive from the same period last year, in line with the airline's planned 12 percent reduction in capacity, the termination of flights to three destinations in the U.S., India and Canada, and the transfer of its operations in Hyderabad, India, to SilkAir. Passenger carriage (measured in revenue per passenger mile) fell 7.9 percent year on year, resulting in a 4 percentage point increase to 80.9 percent in passenger load...
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