Singapore Airlines (SIA) Group said it aims to operate at one-third of its pre-Covid-19 capacity by July 2021.
CEO Goh Choon Phong said on May 20 in a virtual conference involving the media that the company made a loss of S$4.3 billion in the last financial year.
Passenger flown revenue decreased by more than S$12 billion or about 95 per cent to S$684.7 million as passenger carriage fell 98 per cent.
However, cargo now accounts for 71 per cent of the group's revenue, which grew 38.8 per cent to S$2.7 billion in FY20/21.
Capacity cut but going back up slowly
SIA's capacity was slashed to 3 per cent in April 2020 after Singapore closed its borders.
It was at 24 per cent in April 2021.
By July, it is projected to grow steadily to 32 per cent.
Rebuilding capacity, first with cargo
SIA Group has been rebuilding its capacity since last year.
Goh added that the group has been looking for opportunities to expand its network following its record.
These opportunities include a calibrated and safe reopening of borders, as well as participating in the Reciprocal Green Lanes and travel bubbles.
However, the "bright spot", according to Goh, has been cargo.
The strong demand is expected at least over the next couple of months.
The group's airlines include Singapore Airlines, SilkAir and Scoot.
SIA Group also owns SIA Engineering Company.
Cash burn reduced drastically
SIA Group has also reduced monthly cash burn to between S$100 million and S$150 million a month.
This is a significant amount as it has come down from about S$350 million a year ago.
Cash burn should remain "reasonably stable" at current levels, the company forecast.
SIA has driven down costs by S$9.6 billion or 60 per cent.
Non-fuel expenditure due to capacity cuts has been reduced significantly, on top of cost-saving initiatives and government support schemes.
Staff costs down after retrenchment exercise
Staff costs were halved, and down S$1.4 billion.
SIA cut thousands of jobs, and reduced staff salaries and allowances in 2020.
About 20 per cent of positions were reduced in FY2020/2021, and the pay cuts instituted will not change.
Goh said there are no plans to lay off more employees after the "painful process" last year.
Operating with 168 planes
The group is now operating with 168 planes and is retiring five.
A total of 24 new planes are expected in the coming FY, as well as eight 737-8 MAXs.
But the MAXs remain grounded in Singapore and many other areas after the Lion Air and Ethiopian Airlines deadly crashes.
They can only operate with regulatory approval.
More debt financing feasible
SIA Group also said it will issue S$6.2 billion of convertible bonds, underwritten by its majority shareholder Temasek Holdings.
More debt financing will be undertaken if necessary.
SIA Group's S$4.3 billion loss last financial year includes nearly S$2 billion of impairments largely on older planes surplus to requirements.
But the impairment charges this FY will not be this big, the group foresees.
Top photo via Unsplash