With air travel curbed because of the pandemic, Changi Airport Group has sunk into a loss of $954 million for year ended March 31 2021. In the preceding year, it reported earnings of $438 million.
Revenue in the same period slumped by 78% y-o-y to $697 million from $3.12 billion.
Besides Changi Airport, CAG’s financial reporting includes the Tom Jobim International Airport in Rio de Janeiro, Brazil, its 51%-owned subsidiary.
During the year, CAG booked an impairment of $225 million from this asset in Brazil.
“This has been the most difficult time in Changi Airport’s history,” says chairman Tan Gee Paw.
“The enormous turbulence brought about by the global Covid-19 pandemic has decimated Changi’s air traffic and severely jolted the airport’s operations and future development plans,” he adds.
During the year, Changi suffered a 98% plunge in passenger traffic whereas Tom Jobim dropped by 83%.
Jewel Changi Airport (Jewel), a joint venture between CAG and CapitaLand, saw lower footfall as visitor numbers plummeted after the onset of the Covid-19 pandemic.
Some airports in the Group’s overseas portfolio in Russia and China were less impacted due to strong rebound in domestic passenger traffic, CAG says.
CAG took significant steps to curb costs. Two of the four operating passenger terminals were closed and service contracts were “extensively renegotiated”.
As such, coupled with government support, CAG’s operating costs, excluding depreciation, was halved to $737 million and at the operating level, CAG was able to make $178 million.
“Covid-19 looks set to remain for some time as the virus continues to evolve and evade control,” warns CAG’s CEO Lee Seow Hiang.
“CAG is working with the airport community to put in every effort possible to transform our airport operations and concessions business to meet the travel demands of a Covid-19 new normal,” he says.
There are some bright spots though, such as cargo traffic, which in April has practically recovered to pre-pandemic levels seen two years ago.
With vaccination rates growing, there is a good reason to believe that travel will resume in a matter of time.
“When that happens, Changi Airport will be ready to give passengers the confidence to fly again,” says Lee.